15 Jan 2020 Anthony Lehrman
PlusТoken Drama Continues As OTX Researchers Make New On-Chain Discoveries
Despite shutting down operations in late 2019, the PlusToken scam still gives crypto data research companies new bits of information. Dubbed as one of the largest Ponzi schemes in crypto history, alongside OneCoin, the scammers collected over $2 billion worth of funds, as a report from Chainanlysis shows. However, the method of data collection from Chainalysis remains unclear.
Samurai Wallet’s research tool – OTX Research, gives a greater depth about the large Bitcoin (BTC) sell-of from PlusToken’s wallets. OTX found out that the initially disclosed number of 250,000 BTC, transferred during the big sell-off of the PlusToken scammers, “is more likely to be four times higher”.
“Chainalysis did not include references in their work, which arguably lacks scientific, methodological and data back up. There is a lack of data about pre-mix addresses, as well as post-mix clusters and transaction IDs in order to verify the information about their discovery”, OTX Research added.
As of press time, there are no precise calculations of the damage the Ponzi scheme really inflicted, as the data is scarce.
OTX Research further noted that the vast BTC possession could result in significant volatility, as the researchers admit how big the scam really is.
“The initial data showed 200,000 BTC, but they are far more. You don’t see multi-billion scams every day, so we can’t identify the exact damage the PlusToken scheme would inflict. The total amount of BTC most probably is over 1% of the total BTC supply in circulation”, the researchers commented.
PlusToken addresses started shifting 1,050 BTC daily form the first week of August 2019, and the distribution ended in late November 2019. Thanks to poor privacy control of PlusToken wallet holders, the research team at OTX managed to identify the addresses.
According to the research team, the BTC transfer is the most probable cause of Bitcoin falling in Q4 of 2019, skimming the gains on the entire crypto sector. OTX concludes that a further 55,843 to 75,843 BTC is yet to be distributed, which could lead to a new wave of volatility for the world’s #1 cryptocurrency.
In order to keep their anonymity, PlusToken scammers used mixing services like Wasabi. However, OTX explains that to mix such numbers is a short period of time is most likely to lead to an increased inability to hide traces. Users also uploaded “tutorial” videos on YouTube, posting their wallet addresses, which could quickly identify the origin of distribution.
For now, analysts reduced the scammers to several initial “address clusters,” which, according to the research, conducted a series of transactions between them, commonly known as “self-shuffling.” However, self-shuffling does not grant anonymity, as the addresses and transactions are easily tracked and recorded.
On the other hand, major crypto exchanges like Huobi also played a vital role in the sell-off procedure. It turns out almost 250 thousand Huobi addresses have an association with the PlusToken scam. Researchers reduced the number of addresses to a couple of clusters. OTX makes an assumption Huobi was well aware of the situation and actually helped the address mixing procedure.
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