Recent analysis by onchain expert Lookonchain has identified around 789,533 ETH associated with the Plus Token Ponzi scheme, which had remained untouched since April 2021. This activity indicates a potential shift in market dynamics as these dormant wallets begin to move substantial amounts of ETH.

The tokens were linked to the ‘Plus Token Ponzi 2’ wallet, responsible for disbursing ETH to numerous smaller wallets back in 2020.

Involvement of Chinese Authorities

During a crackdown on cryptocurrency scams, Chinese authorities confiscated approximately $4.2 billion worth of various crypto assets, including those associated with the Plus Token fraud.

• 194,775 Bitcoin (BTC)
• 833,083 Ether (ETH)
• 497 million XRP
• 6 billion Dogecoin (DOGE)
• Other assets, including Bitcoin Cash (BCH), Litecoin (LTC), and Tether (USDT)

While the seized assets were valued at around $4.2 billion in late 2020, their current worth has escalated to approximately $13.5 billion due to rising market prices.

Potential Market Consequences

The reactivation of these wallets and the possibility of a sell-off of confiscated funds could instigate panic within the market. The current price for ETH stands near $2,474, showing an increase of about 1% for the day. The outflows from the wallets were first observed on August 7.

Understanding Ponzi Schemes

On July 4, a federal judge in Illinois ruled in favor of the United States Commodity Futures Trading Commission (CFTC) in a case involving two altcoins labeled as commodities within the context of a Ponzi scheme.

The scheme had deceived investors by offering “steady returns” of 15% annually from investments made in “digital asset commodities.” According to the CFTC, the altcoins in question were classified similarly to Bitcoin, which has regulated futures trading associated with it.