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Bitconnect Celsius Network
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The PlusToken Ponzi scheme is infamous for being one of the most significant fraudulent activities in the history of cryptocurrency. With a loss amounting to billions of dollars, it has not only affected individual investors but also played a role in the destabilization of the cryptocurrency market for a certain period. In this article, we will comprehensively examine the PlusToken scandal, exploring its origins, mechanisms, downfall, and the lessons drawn from its unfortunate legacy.

Origins of PlusToken

The PlusToken scheme originated in China in mid-2018, presenting itself as a high-return investment platform for cryptocurrency enthusiasts. Its creators portrayed PlusToken as a decentralized wallet that would not only allow users to store cryptocurrencies but also provide significant monthly returns on holdings. This promise of lucrative rewards swiftly attracted a substantial number of investors, primarily from China and South Korea.

Mechanisms of the Scheme

Underneath the veneer of a legitimate enterprise, the PlusToken scheme operated on classic Ponzi principles. New investments were used to pay previous investors, creating an illusion of a profitable enterprise. The platform offered referral incentives, encouraging users to bring in more investors, further expanding its network.

PlusToken accepted investments in the form of various cryptocurrencies, including Bitcoin, Ethereum, and EOS, among others. Investors were promised returns ranging from 8% to 16%, numbers that are highly unsustainable in any legal investment environment. The promise of high rewards and the use of influential marketing strategies led to the rapid accumulation of users and funds.

The Fall of PlusToken

Suspicion and scrutiny around PlusToken increased as more individuals engaged with the platform. In June 2019, several individuals associated with the scheme were arrested. However, by this time, the damage had already been done, with an estimated $2 billion to $3 billion of investor funds unaccounted for.

The scheme’s collapse led to chaos in the cryptocurrency market. A significant volume of the stolen assets was dumped onto various exchanges, leading to a drastic decline in the value of many cryptocurrencies. The market took considerable time to recover from the impacts of these large and sudden sales.

In the wake of the scheme’s collapse, Chinese authorities took swift action against those involved. A total of 109 individuals were arrested in connection with PlusToken, and the legal proceedings were initiated swiftly to bring them to justice. Many of the arrested individuals were found guilty of fraud, with some facing lengthy prison sentences.

The stolen assets, however, were harder to recover due to the pseudo-anonymous nature of blockchain transactions. Although some funds were eventually retrieved, a significant portion of the stolen wealth remains lost.

Lessons Learned

The PlusToken scandal is a stark reminder of the risks inherent in the relatively unregulated cryptocurrency market. Its occurrence has led to calls for more stringent regulation and oversight of cryptocurrency transactions and platforms. For individual investors, it serves as a cautionary tale about the dangers of engaging with unverified and unregulated investment schemes, particularly those promising unbelievably high returns.

Moreover, the incident has highlighted the importance of due diligence and critical scrutiny when investing in cryptocurrencies. As the market continues to grow and attract new investors, awareness and understanding of the risks involved are crucial in preventing a recurrence of similar fraudulent activities.

The Bottom Line

The PlusToken Ponzi scheme stands as a dark episode in the history of cryptocurrency, exemplifying the significant risks and the potential for fraud within the market. As the sector continues to mature, it is essential to learn from past mistakes and implement measures to protect investors from similar schemes in the future. Vigilance, education, and regulation are the keys to fostering a safer and more stable cryptocurrency environment for all.


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