A new report on the PlusToken Ponzi scheme shows regulated exchanges are being used to dump coins, despite stringent Know Your Customer (KYC) identify verification rules.

Investigative company OXT Research has released a second edition of their in-depth blockchain analysis on the PlusToken scam.

The report explained PlusToken funds generally moved from unmixed allotments and locations, to mixers. After mixers, the funds saw consolidation, and then finally distribution. OXT’s report said:

“Approximately 80% of coins entering mixing have been distributed while up to 33,872 BTC remain in the mixer and 3,853 BTC are in the distribution process, resulting in a total of 37,725 BTC that have entered mixing, but not yet been distributed.”

Around $1.3 billion worth has been sold off in the past seven months with the report noting that distribution increases into market strength and “pauses” with market weakness. OXT found that nearly 70% of the total hoard has been distributed to date meaning that “most of PlusToken's market effects have largely passed.”

A large amount of coins ended up on OKEx. “OKEx is a newly labeled and significant coin destination having received nearly 50% of February distributions,” the report stated, adding that Huobi also remains one of the most significant coin destinations. 

The PlusToken coins were offloaded on regulated exchanges

ErgoBTC, an analyst closely following developments, pointed to an important aspect of the report — the usage of regulated exchanges for offloading BTC profits, as opposed to over-the-counter (OTC) selling. ErgoBTC tweeted:

“Regulated KYC'd exchanges have been the main destination of these coins throughout the post-shutdown period. Despite the ‘right narratives’ constructed by vested business interests, ‘OTC’ has not been the preferred destination of these coins.”

Governing bodies across the globe have pushed KYC and Anti-Money Laundering (AML) requirements for years, expressing the laws as a method of fraud prevention. 

OKEx requires KYC to withdraw funds from the platform and so does Huobi.

PlusToken has been at it for almost a year

For many months crypto markets have experienced the effects of the unravelling of one of the largest alleged scams in the industry’s history. The operation reportedly began in 2018, ammassing 10 million participants by 2019. 

Authorities apprehended several of the scheme’s operators in June 2019, although it is uncertain how many involved parties still remain at large. Some headlines note a potential correlation between Bitcoin’s 2019 downtrend — which started around the same time as the PlusToken arrests — and apparent PlusToken dumping. 

PlusToken moved more BTC on March 6

Data from several days ago shows a significant amount of funds were moved from wallets thought to be associated with PlusToken. 

ErgoBTC noted that roughly 13,000 Bitcoin were transferred to a coin mixer, according to a March 6 tweet

Less than 24 hours later, Bitcoin’s price fell from $9,200 down to $8,850. Bitcoin’s price continued further descent, down to a press time price of $7,930.  

However other experts see more of a correlation to declining mainstream markets, explaining that investors are flocking to more stable assets.