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Around 7,000 ethers (ETH) valued at approximately $16.7 million have been moved from addresses associated with the infamous PlusToken Ponzi scheme, according to crypto researcher ErgoBTC.
In early August, the remnants of ETH seized from the multibillion dollar PlusToken scheme awoke on-chain for the first time since 2021.
— ∴FreeSamourai∴ (@ErgoBTC) October 9, 2024
Over the last 24h about 7k ETH of the remaining 542k ETH ($1.3b) was sent to exchanges indicating intent to begin selling the remaining tokens. pic.twitter.com/tu2o7y4o4L
This shift has raised alarms, particularly as it suggests the possible sale of a significant portion of the $1.3 billion in ETH that Chinese authorities seized from the scam.
The PlusToken scheme, which operated between 2018 and 2019, was one of the largest crypto scams in history. It defrauded approximately 2.6 million users and resulted in the seizure of nearly $4 billion worth of cryptocurrencies, including BTC, ETH, DOGE, and XRP, by Chinese authorities.
The scheme’s operators were arrested, but the legal fallout continues to affect the market today.
Movement of Seized Ether
According to ErgoBTC, the recently transferred 7,000 ETH from PlusToken-linked wallets marks a significant movement after these wallets remained inactive since 2021. This activity mimics previous attempts to obscure the sale of seized assets.
The analyst noted:
“Current ETH distribution follows the same attempted obfuscation pattern as that of the BTC in 2019, with a likelihood of full sale of the $1.3 billion of ETH in the future.”
The movement of these funds has already impacted the Ethereum market. Following the news, ETH's price dipped below the $2,400 mark, indicating growing concerns about additional sell pressure.
If the remaining 542,000 ETH, worth over $1.3 billion, are sold, ErgoBTC predicts that Ethereum's price could plummet further, possibly dropping below the $2,000 threshold.
Historical Context
Between 2019 and March 2020, a significant portion of the seized Bitcoin, amounting to approximately $1.3 billion, was sold, causing notable volatility in the market.
However, the Ethereum holdings remained largely untouched until the summer of 2021 when a third of the 840,000 ETH was transferred to the less popular exchange Bidesk. Following this, the remaining ETH sat dormant across various mixing addresses until early August 2024, when 542,000 ETH was consolidated into 294 new addresses, according to the findings from ErgoBTC.
Data from on-chain analysis shows that over 2,800 ETH from various wallets linked to the seized assets was placed in a single address, further fueling concerns about a large-scale sell-off.