Plus Token’s $1.3 Billion in Ether: What’s Next?
The infamous Plus Token Ponzi scheme, which defrauded investors between 2018 and 2019, has left a significant quantity of Ether in a precarious position. Recently, around $16 million worth of Ether associated with this scheme began moving towards exchanges, raising speculations of a large-scale sell-off.
Unraveling the Plus Token Ether Movement
The Plus Token scam led to the seizure of about $4.2 billion in cryptocurrency by Chinese authorities, including 833,083 Ether. According to analyst ErgoBTC, approximately one-third of this Ether was sold previously on the Bidesk exchange, which is now defunct. The rest, about 542,000 Ether, has been consolidated into 294 addresses after starting to move in August.
This week, 15,700 Ether made a move, with 7,000 Ether entering exchanges, indicating a possible intent to sell. While this movement isn’t significant enough to cause a supply shock, the potential sale of the remaining 540,000 Ether, valued at $1.3 billion, could have a considerable impact on the market.
The Debate Over Plus Token’s Remaining Ether
The movement of the Ether has sparked debates among analysts. Initially, blockchain tracker Lookonchain claimed that 789,533 dormant Ether from Plus Token had started moving. However, this assertion was contested, and Lookonchain’s post was removed after analyst EmberCN reported that 268,843 Ether had already been sold at Bidesk in 2021.
ErgoBTC and EmberCN’s analyses align on the point of Ether being distributed across more addresses than initially identified. Despite these varying reports, the consensus remains that a significant amount of Ether from the Plus Token scam is still at large and could enter the market.
Arrest of the ‘Crypto King’
In another development, the Filipino police have arrested a 23-year-old self-proclaimed “Crypto King,” accused of defrauding investors of approximately $10.5 million. Known as Joshua, this individual allegedly targeted high-profile victims such as media figures and government employees, maintaining a database of potential victims.
The Fall of the ‘Crypto King’
Joshua, or Vance Joshua Tamayo, was previously arrested in September 2023 under suspicions of a similar scam. He portrayed himself as a crypto expert, offering investors a 4.5% monthly return through what he claimed was a legitimate business. Initially, he met these promises but later severed communications with investors.
After being released on bail for a previous charge, new complaints have surfaced, leading to an increase in the alleged scam amount. Authorities are now planning to file a large-scale fraud case against Tamayo, which would eliminate the possibility of bail.
Upbit’s Monopoly and Bank-Run Fears
Upbit, a leading crypto exchange in South Korea, is under scrutiny for its dominance in the market. This has raised concerns of a potential bank run at K-Bank, Upbit’s banking partner, which holds a significant portion of Upbit’s customer deposits.
The Risks of Market Monopoly
Due to South Korean regulations, crypto exchanges must partner with local banks for fiat transactions, and only five exchanges currently meet these requirements. The Upbit-K-Bank partnership controls 70% of the local crypto trading market.
During a National Assembly audit, it was revealed that K-Bank holds around 4 trillion won in Upbit customer deposits, roughly a fifth of the bank’s total funds. This concentration of funds has sparked fears that any disruption in Upbit’s services could trigger a bank run.
Regulatory Concerns and Future Steps
Lawmaker Lee Kang-il criticized the Financial Services Commission (FSC) for allowing such market concentration, likening it to a “Squid Game” scenario where only one company survives. In response, FSC Chairman Kim Byung-hwan acknowledged the concerns and stated efforts are underway to enhance Anti-Money Laundering regulations and investor protection. The FSC will also investigate market monopoly issues to mitigate structural risks.
Hong Kong’s Crypto License Surge
Hong Kong is poised to increase the number of licensed crypto exchanges by the year’s end, according to Julia Leung, CEO of the Securities and Futures Commission (SFC). This move is part of an effort to regulate the crypto market more effectively.
The Licensing Process
Currently, only three exchanges have been approved to operate in Hong Kong, with
