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EOS Ecosystem App Shuts Down; Creators Disappear With $52 Million in User Funds

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EOS Ecosystem App Shuts Down; Creators Disappear With $52 Million in User Funds

An EOS-based wallet application has allegedly shut down and its creators appear to have run away with approximately $52 million user funds.

April 21, 2020 | AtoZ Markets – An alleged EOS Ponzi scheme has scammed users out of more than $52 million. A report unveiled this news on April 20, noting that China-based EOS Ecosystem, a renowned EOS wallet shut down and disappeared with its users’ funds.

Reportedly, the wallet’s operator locked investors out, barring them from accessing their accounts via the EOS Ecosystem app. The operator then proceeded to move a large sum of the funds from the service’s account to a different account. The account is dubbed huobidevice3. However, the account is not affiliated with the Huobi exchange. Purportedly, this account has $41.9 million worth of EOS tokens at the moment.

EOS Ecosystem was reportedly a widely-known scam

Prior to shutting down, EOS Ecosystem functioned as an interest-paying wallet. Users entrusted their EOS tokens to the wallet and earned daily profits in return. EOS Ecosystem succeeded partly because it attracted a lot of people and paid out the daily returns for a few months.

As such, the people that earned the interests evangelized the project and attracted more users. However, several scandals have rocked this project. Allegedly, it was a widely known crypto Ponzi scheme that has remained afloat over a long time.

ChainNews previously reported that EOS Ecosystem does not have an EOS node as it claims and has been running a pyramid scheme. In 2019, legal action was filed against the EOS Ecosystem in a local Chinese court in Tengzhou. The case was that the platform conducted a pyramid scheme that consisted of about 33 million EOS cryptos, which is currently worth $81 million.

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On top of this, the wallet’s daily returns were also suspicious.

According to a report,

“The static income is as high as 0.342% -3.42% per day, so this is pure ZJP. The annual reward of EOS voting is to split the total of 1% of the newly added EOS tokens, so the final result is to run away with the money.”

The stolen funds are hard to cash out

While EOS Ecosystem’s operators managed to steal the funds successfully, they will reportedly have a hard time cashing out. This is because EOS is easy to track. As such, the funds could just sit in the huobidevice3 account for a long time as the alleged scammers wait for this issue to cool down.

Do you think the alleged EOS Ecosystem Ponzi scheme will have an impact on the price performance of EOS? Share your thoughts in the comment section below.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.

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