Key Points
- CryptoQuant CEO Ki Young Ju asserts the Chinese government has likely sold $20 billion in Bitcoin seized from PlusToken in 2019.
- The seized Bitcoin was reportedly put into mixers and sent to various Chinese exchanges.
CryptoQuant CEO, Ki Young Ju, has suggested that the Chinese authorities have already sold the Bitcoin acquired from the PlusToken scheme in 2019, which is estimated to be worth $20 billion.
In a recent post, Ju shared an analysis from CryptoQuant on the Bitcoin reserves of PlusToken that were impounded by the Chinese government and their possible whereabouts. The chart illustrated the value of PlusToken’s 194,775 Bitcoin reserve in comparison to the value found within mixers.
Chinese Government’s Role
The data leads Ju to believe that the Chinese government has most likely sold the confiscated Bitcoin. Despite the Chinese Communist Party’s assertions that the Bitcoin stash has been transferred to the national treasury, it remains unclear whether the Bitcoin was sold or retained as Bitcoin. Ju is of the opinion that it was sold.
The concept of a censored regime holding censorship-resistant money seems improbable, as Ju pointed out in his post.
PlusToken Scheme Fallout
In another post, Ju explained that the Bitcoin funds seized from the PlusToken scheme were placed into mixers and dispatched to several Chinese exchanges such as Huobi. Consequently, Ju inferred that the Chinese authorities would not have gone to the trouble of using mixers or multiple exchanges unless they intended to sell the Bitcoin.
This is not the first instance of China being suspected of selling crypto assets linked to the PlusToken scheme. In July 2024, Chinese journalist Colin Wu suggested that the Chinese government sold some of the seized crypto through Beijing Zhifan Technology.
Wu alleged that the majority of the confiscated Bitcoin were sold between late 2019 and mid-2020.
PlusToken was a Ponzi scheme that was taken down by the Chinese authorities in 2019. The authorities seized 194,775 Bitcoin and 833,083 Ethereum, along with hundreds of millions worth of other cryptocurrencies, including Ripple, Bitcoin Cash, and Dogecoin.
The multi-billion dollar Ponzi scheme resulted in the conviction of 15 individuals and affected around 2 million investors.
In 2021, China imposed a complete ban on crypto trading and mining activities. However, this has not deterred Chinese citizens from trading crypto, as it is not technically illegal to own cryptocurrency in the country.
Data from Chainalysis reveals that from July 2023 to June 2024, the Chinese cryptocurrency market processed nearly $50 billion in crypto transaction volume.
