TL;DR
PlusToken was one of the largest cryptocurrency Ponzi schemes in history, defrauding victims — primarily in mainland China — of an estimated $3–$6 billion between 2018 and 2019. Disguised as a legitimate crypto-investment platform, it lured participants with promises of high returns and referral rewards. The scheme collapsed in mid-2019 when organizers vanished with the funds. Over 100 people were arrested, and ringleaders were sentenced to up to 11 years in prison. Despite these prosecutions, the scheme's financial aftershocks continue to ripple through cryptocurrency markets, and copycat scams persist — underscoring the urgent need for consistent global crypto regulation.
How did the PlusToken scam work?
Imagine if a banker told you that you could invest a tiny amount of money and get a great deal in return. You'd likely scape together all the funds you have now, and you'd tell everyone you know to join you and make money too.
PlusToken, like most Ponzi schemes, relied on a gullible audience of people hoping to make quick money on something they didn't quite understand.
If you signed up for PlusToken, you would:
Invest. You pay a fee, and the scammers tell you they will use your money to develop cryptocurrency products, like bitcoin.
Transform. An app helps you convert your money into cryptocurrency, which you can then use to buy more PlusToken products.
Recruit. Entice your friends and family members to join, and you'd gain more purchasing power and credits.
Accept. Any profits are paid via PlusToken, which you can reinvest very quickly.
If you lived in mainland China in 2019, it was nearly impossible to resist PlusToken. You saw ads on your social media accounts, you saw prompts in grocery stores, and the scammers enticed you to go to physical meetups to learn more about the products.
While early investors did make money, their profits came on the backs of other victims. Investments from new PlusToken clients went toward paying dividends owed to existing clients. There were no real products.
How did the PlusToken Ponzi scheme end?
Cracks in the PlusToken plan appeared in June 2019, as investors struggled to withdraw their earnings from the platform. Late that month, the organizers withdrew more than $3 billion in bitcoin and other cryptocurrencies and posted the cryptic message, "We have run."
Cryptocurrencies aren't like cash assets. Investors typically move money from wallet to wallet before transforming it to a new currency form and escaping with it. The flow of funds triggered by the PlusToken scam continues today.
How did PlusToken affect cryptocurrency markets?
As recently as March 2020, cryptocurrency markets continue to struggle with the aftereffects of the PlusToken scheme. On one day, the markets fell by nearly 10 percent, and analysts attributed the drop to PlusToken scammers moving bitcoin around and offloading their holdings.
What happened to the PlusToken organizers?
Estimates of the final cash prize attributed to the masterminds range from $3 billion to $6 billion, although calculating the true amount is a remarkably difficult task.
In July of 2020, more than 100 people were arrested in connection with the fraud. And in December of 2020, the ringleaders were sentenced to up to 11 years in prison for their work.
Is PlusToken still active today?
With ringleaders in prison and news of the scam filling the papers, it's reasonable to assume that PlusToken is dead and gone. Unfortunately, that's not quite the case.
Scammers often promise new beta versions of PlusToken on social media sites. It's likely those announcements are meant to keep investors on the hook, so they won't exit the platform altogether and take their money with them.
What tools exist to detect cryptocurrency fraud?
Officials look for new ways to protect the cryptocurrency market. Some suggest that tools involving on-chain analytics could spot market problems quickly before people lose their money.
Why is cryptocurrency regulation so difficult to enforce?
But the cryptocurrency regulation landscape varies dramatically from country to country. In Hong Kong, for example, cryptocurrency isn't considered a currency at all, and as a result, assets like this aren't subject to regulation.
Meanwhile, cryptocurrency traders can live anywhere in the world, and their trades often cross borders. As long as a gap exists in regulation between countries, it's likely new schemes like this will appear regularly.
Cryptocurrency markets rely on the concept of blockchain, which can be very difficult to understand. Read this podcast summary from Okta to learn more about what blockchain is and how it works.
What is the key timeline of the PlusToken scam?
| Date | Event |
|---|---|
| June 2019 | Investors struggle to withdraw; organizers vanish with $3B+ in crypto |
| March 2020 | Cryptocurrency markets drop ~10% attributed to PlusToken selloff |
| July 2020 | 100+ people arrested in connection with the fraud |
| December 2020 | Ringleaders sentenced to up to 11 years in prison |
Frequently asked questions
What made PlusToken different from a legitimate cryptocurrency investment?
Unlike genuine crypto platforms, PlusToken had no real underlying products. Returns paid to early investors came entirely from funds contributed by newer participants — the defining characteristic of a Ponzi scheme. The app and investment narrative were used to create the illusion of legitimacy.
How much money did the PlusToken scam steal?
Tracking the precise total is difficult due to the complex, multi-wallet movement of funds across the blockchain — but analysts believe the organizers absconded with between $3 billion and $6 billion in bitcoin and other cryptocurrencies.
Why did PlusToken spread so quickly in China?
The scheme was heavily promoted through social media advertising, in-store prompts at grocery stores, and in-person meetups — making it nearly impossible to avoid in mainland China in 2019. Its referral-based recruitment model also incentivized existing members to bring in friends and family.
What caused cryptocurrency markets to drop after PlusToken collapsed?
Even after the scheme's collapse, scammers continued moving large volumes of stolen bitcoin through wallets and converting it to other currencies. As recently as March 2020, a single day saw markets fall nearly 10%, with analysts attributing the drop to PlusToken operators offloading their holdings.
Were the PlusToken organizers ever caught and punished?
Yes. In July 2020, more than 100 individuals were arrested in connection with the fraud. By December 2020, the ringleaders had been sentenced to prison terms of up to 11 years for their roles in the scheme.
Is PlusToken completely gone, or are there still active scams using its name?
Despite the arrests and convictions, PlusToken has not fully disappeared. Scammers continue to promote supposed new beta versions of the platform on social media, likely to prevent remaining investors from withdrawing funds. The lack of consistent global cryptocurrency regulation makes it difficult to fully shut down such schemes.
References
How the PlusToken Scam Absconded With Over 1 Percent of the Bitcoin Supply. (August 2019). Bitcoin Magazine.
Bitcoin's Sharp Price Drop May Have Been Prompted by $120M Scam Selloff. (March 2020). Coin Desk.
China Arrests Over 100 People Suspected of Involvement in PlusToken Cryptocurrency Scam. (July 2020). ZD Net.
Chinese Cryptocurrency Scam Ringleaders Jailed in $2.25 Billion Ponzi Scheme Involving PlusToken Platform. (December 2020). China Macro Economy.
Cryptocurrency Exchanges and Custody Providers: International Regulatory Developments. (October 2018). Norton Rose Fulbright.
