First-instance verdict of PlusToken issued: Highest sentence for 16 defendants is only 11 years, all proceeds of the crime will be contributed to the national treasury

After all major members were arrested at the end of July, the global well-known Ponzi scheme "PlusToken" has announced the verdict of the first trial. The 16 defendants, including Chen, will be sentenced to imprisonment ranging from two to eleven years and fined, with the confiscated stolen property, proceeds, interest, criminal tools to be turned over to the national treasury according to the law.

Famous International Ponzi Scheme Comes to an End

PlusToken, disguised as a cryptocurrency wallet and promoted with the slogan of "smart brick moving," was launched in 2018 during a bear market in the crypto industry. Even without recruiting new users, investors received a monthly dividend of 10%. Although it only lasted a little over a year, it amassed an astonishing amount of funds, exceeding 2 billion globally, with some reports suggesting a total capital of over 3 billion USD.

Unlike other projects using "smart brick moving" as a gimmick, PlusToken, in a general downturn of the crypto market that year, not only showed daily profits but also allowed daily withdrawals, making it easier for investors to fall for the scheme. In June 2019, some users discovered that PlusToken could not withdraw funds, leading to the exposure of the scam.

According to the Chinese media "Prosecutors' Daily", the main suspects with the last names Chen and Ding established the PlusToken platform in May 2008, rapidly expanding in scale. The key data are as follows:

• Over 2 million members globally
• Up to more than 3,000 layers in the referral system
• Approximately $7.5 billion in total funds raised (discrepancy from previous reports)
• Absorbed over 9.48 million BTC and ETH

The prosecutors categorized the main suspects as "initiators" and "key executors," with Chen being the project initiator, Ding known as the "strategist" active in the blockchain field, capable of leveraging connections and resources, adept at hiring Europeans and Americans to fabricate the project's international background. Peng, proficient in pyramid scheme tactics, all played crucial roles in organizing and leading the project. The report only mentioned that Ding would be sentenced to eight years and eight months in prison and fined 4 million RMB.

Questions Arise in the Report

Previously, on July 30, the Chinese media Caixin reported that "PlusToken" was under the unified command and investigation by the Chinese Ministry of Public Security, leading to the arrest of all 27 main suspects and 82 core members who fled overseas. However, the number of suspects claimed and the outcome of the first trial today (only 16 people) differ significantly.

Furthermore, the previous report also mentioned the resistance to examination of cryptocurrencies, meaning if fraudsters refuse to disclose their private keys, their assets are practically inaccessible. During the investigation, the prosecutors found that 450 bitcoins were unaccounted for, with the holder - a suspect surnamed Lu - claiming as expected that he "forgot the mnemonic phrase."

After cross-referencing testimonies, the prosecutors targeted Lu's brother - Lu Xilong, monitoring his communication devices and wallet addresses in real-time. After multiple reviews, they successfully recovered over 200 bitcoins and more than 100,000 EOS tokens. Normally, obtaining private keys would be difficult, but it is also possible that the suspects failed to secure their private keys in a safe computer environment, leading to exposure.

Regardless, this international scam that shook the cryptocurrency industry has finally come to an end. Surprisingly, all the ill-gotten gains were handed over to the national treasury, serving as a warning to many retail investors enthusiastic about "investment projects": even if the funding scheme is eventually cracked, all the assets you invest are likely to be lost forever.