Is China About to Dump $1.3B in ETH From PlusToken Seizure?

The Chinese government may be about to unload a large batch of seized Ethereum, according to on-chain sleuths. 

Oct 10, 2024 - 04:00
Is China About to Dump $1.3B in ETH From PlusToken Seizure?

On Oct. 10, crypto researcher ‘FreeSamourai’ told his X followers that around 7,000 ETH of the remaining 542,000 ETH from the PlusToken seizures was sent to exchanges.

This indicates “intent to begin selling the remaining tokens,” they stated, but this remains to be seen, and no major selloff has occurred yet.

The remaining stash of ETH from the seizure is valued at a whopping $1.3 billion and would put substantial downward pressure on spot markets if it hasn’t already been sold off.

What Was PlusToken?

PlusToken released its white paper in Feb. 2018 marketing itself as a South Korean crypto exchange and wallet provider that could provide users with high-interest accounts. However, it was a multi-billion dollar Ponzi scheme that ended in mid-2019. By the time of its closure, it had amassed 194,000 BTC and 830,000 ETH.

By the end of 2020, Chinese police had seized crypto assets worth $4.2 billion and arrested more than 100 people linked to the scam. Court documents reported that the confiscated assets had been turned over to Beijing Zhifan Technology Co. for conversion to cash, with proceeds to be used as recompense.

The majority of the BTC has already been sold, reported the researcher, who added that the ETH “was sent to a relatively unknown exchange called Bidesk, and presumed sold.”

In early August, blockchain analytics service Lookonchain claimed that wallets linked to PlusToken had begun shifting around 790,000 ETH. However, this was debunked by Chinese blockchain analytics account EmberCN which stated at the time that most of the ETH had already been sold in 2021.

There were no recent updates on the EmberCN account regarding these latest ETH movements.

ETH Price Outlook

As if Ethereum didn’t need more FUD and selling pressure, the asset has retreated again today. It has dumped a further 2% on the day to fall below $2,400 at the time of writing.

Ethereum has been trading sideways for more than two months, failing to break resistance at $2,700 but holding above support at $2,200.

Further selling pressure could see it fall back to this level very quickly, considering that broader crypto markets are retreating again.

However, it remains to be seen whether the PlusToken ETH is another unexpected supply overhang, but the premise has delighted Bitcoin maxis.

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