Plus Token, a blockchain based mobile wallet company operated by Chinese nationals was able to entice about 10 million cryptocurrency users to store their digital money in the company, by promising them high yields of interests. Although blockchain reviewers voiced doubts about Plus Token as a legit cryptocurrency operator, the ewallet site was able to gain the trust of cryptocurrency users, which numbered to as many as 10 million Plus Token members by July 2019.
Unknown to the millions of members, Plus Token was into a Ponzi-like scheme of paying dividends using digital money coming from new cryptocurrency investors.However in July of this year, Primitive Ventures, another blockchain-based company owned by Dovey Wan took notice of the ongoing mass sell-off being carried out by the fraudulent Chinese company.
Ms. Wan alerted players in the cryptocurrency ecosystem by sending out tweets about the Plus Token mass sell-offs. She called on other cryptocurrency exchange operators to blacklist the company. According to Ms. Wan, Plus Token still has control of a large amount of cryptocurrency which it still intends to dump and launder using various digital wallets linked to Plus Token.
In order to hasten preventive actions, Ms. Wan attached investigative data gathered by Peckshield, a security audit firm and the e-wallet addresses associated with Plus Token. The Peckshield report showed how real money flowed from PlusToken to the questionabl e-wallets early in July, the same time when Plus Token started dumping the digital money entrusted to the company by millions of cryptocurrency owners.
In a recent oped written by Ms. Wan for Coingraph, she reported that Chinese authorities have already hunted down the core team running the Plus Token cryptocurrency Ponzi scheme. Six of the Plus Token Chinese nationals were extradited to mainland China by Vanuatu, an island country located in the South Pacific.
Crypto Analytics Firm Explains How Plus Token Navigated the Sell-Off
London-based crypto-analytic firm Token Analyst said Plus Token did not sell off cryptocurrencies directly to exchange and trading sites. Instead, the fraudulent company used online mixing services to obscure the origins of the blockchain transactions, before they eventually reached the e-wallet addresses owned by Plus Token.
What Do Online Mixing Services Do in the Cryptocurrency System?
Although using cryptocurrencies allows users to hide their identity when using digital money for peer-to-peer and other online transactions, there is still a database in which comprehensive information about cryptocurrency transactions are stored. Keep in mind that cryptocurrency transactions require the real identity of the owner, but are kept confidential when recorded as blockchain entries through the use of key codes.
Each movement of a specific amount of cryptocurrency, indicates all keycodes involved in a chain of cryptocurrency encryptions that recorded the transfers of digital money. Anyone who would be interested in knowing the true identity of a cryptocurrency source can simply trace it through the related blockchain database.
This is where online mixing services play an important role. The services they offer involve mixing their customer’s cryptocurrency funds with cryptocurrency funds owned by other people. That way, the trail leading back to the original owner of the digital money will be obscured.