Chinese authorities have prosecuted six members of the PlusToken scam, a court filing shows. The alleged scam ran for over a year and pocketed $5.7 billion.
Six key members of the scheme, Chen Shaofeng, Liu Jianghua, Lu Qinghai, Jin Xinghai, Wang Yin, and Zhang Qin, were named in the filings on suspicion of organizing and leading the alleged Ponzi scheme.
Chinese authorities made 109 arrests in connection to PlusToken scam
Operators of the now-defunct multi-level marketing (MLM) firm allegedly spied on gullible investors, promising them handsome payouts if they invested in the token and, in turn, urged others to invest in turn of a small “commission.”
The move came a month after Chinese police made 109 arrests in connection to PlusToken, nabbing over 27 members of its “core” team and 82 other “key” promoters.
At its peak, PlusToken involved more than 2 million participants, with more than 3,000 hierarchical relationships, with the total value of digital currencies involved exceeding 40 billion yuan ($5.7 billion), as per earlier reports.
How PlusToken became the biggest Ponzi scheme
PlusToken ran its alleged scheme under the cover of being an innocent crypto wallet and interest-bearing application from South Korea. It promised over 10%-30% in monthly gains on initial capital to users based on a generous referral program.
Related article: PlusToken Scammers Move Stolen Ethereum to Unknown Wallet
And it worked—until it didn’t. PlusToken managed to attract an estimated 3 million users by May 2019, but soon after, users discovered they could not access their funds on the PlusToken platform, which eventually led to them seeking police intervention.
3/ The #PlusToken scam is alleged to have been ended by #Vanuatu Police on the 27th of June. According to reports in Chinese media on the 1st of July that showed photos of some of the suspects arrested in Vanuatu & the alleged ring leader in China who was reported to be at large. pic.twitter.com/9knaWlSzIa— DLT Vanuatu (@DLT_Vanuatu) July 14, 2019