CryptoQuant CEO and Founder, Ki Teenage Ju he stated that Chinese authorities have already liquidated a huge amount of BTC originally linked to the PlusToken scam. In his post on X (formerly Twitter) on January 23, Ju stated:
“Imo, China has already sold 194,000. Bitcoins. BTC seized by PlusToken in 2019 was sent to Chinese exchanges such as Huobi. The CCP stated that it had been “transferred to the national treasury”, without explaining whether it had been sold. A censored regime with censorship-resistant money seems unlikely.”
He then provided further details on the possible fate of these Bitcoins: “The BTC seized from the PlusToken scam was mixed and sent to exchanges in 2019. There is no point in using mixers and multiple exchanges if they have not sold it.”
The remarks point to an ongoing debate over the fate of significant Bitcoin holdings confiscated by Chinese authorities in 2019. While the government publicly announced that the digital assets had been “transferred to the treasury,” no clear explanation was ever provided as to whether they were retained or sold. However, according to Ki Teenage Ju, evidence suggests that large-scale offloading may have been carried out through local exchanges.
The history of Bitcoin PlusToken
The PlusToken episode itself is one of the most celebrated examples of illegal crypto activities affecting market dynamics. At the beginning of 2019, PlusToken accumulated a huge supply of Bitcoins – network analysts estimated that it constituted from 1% to 2% of all BTC in circulation at that time.
The program appeared to create an artificial surge in demand that helped boost Bitcoin’s price from just over $3,000 to nearly $14,000 by mid-year. Observers noted that during this time, investigators identified suspicious BTC flows passing through addresses associated with PlusToken, raising questions about market manipulation.
According to data supplemented by Ki Teenage Ju’s screenshots, the period of Q1 and Q2 2019 was characterized by a rapid price raise of 300%. This raise was partly the result of PlusToken recruiting unsuspecting investors and the resulting artificial buying pressure on Bitcoin.
Meanwhile, institutional support for cryptocurrencies was growing, as exemplified by Fidelity’s entry into custody services. As PlusToken continued to accumulate vast amounts of Bitcoin, its impact on the market became increasingly worrisome to analysts who saw the threat of a major sell-off looming.
During the third and fourth quarters of 2019, global regulatory attention on crypto assets became more pronounced, as illustrated by statements and guidance from the SEC, CFTC, FinCEN and other agencies. At the same time, fresh opportunities for institutional adoption have emerged, most notably with Bakkt’s introduction of regulated, physically settled Bitcoin futures.
However, the biggest story on the chain during this period involved the second phase of the PlusToken saga, when the scam’s BTC reserves, which peaked at around 171,000 coins, began to massively move to exchanges starting in July 2019.
Observers saw these reserves decline rapidly after tens of thousands of BTC were apparently sold into the market, pushing the price back from nearly $14,000 to the mid-$6,000 range by the end of the year. In effect, it was a widespread sell-off that was considered one of the most significant “indirect liquidity attacks” on Bitcoin.
At the time of publication, the BTC price was $103,111.
Featured image created with DALL.E, chart from TradingView.com
