History’s third largest Ponzi, Plus Token, took in nearly 10 million Ethereum—worth $1.9 billion—from over 800,000 victims, according to analysis conducted by Elementus. These coins have the potential to flood the ETH market should the perpetrators cash out.
Background on the Plus Token Wallet ponzi
Plus Token Wallet, a mobile app promoted across China, South Korea, and South East Asia promising monthly returns upward of 10 percent, collapsed late June—leaving its mark as the world’s third largest Ponzi scam.
Yet, only recently have researchers uncovered the magnitude of the scheme. A few days ago, evidence showed that over $2.1 billion Bitcoin was sitting in Plus Token wallets. These coins may find their way back on to the market, shocking prices with a glut of supply.
Today, an analytics firm released details behind an additional $1.9 billion Ethereum that were taken in by the scam.
Deeper analysis on the Ponzi’s damages
Elementus, a company which indexes and organizes blockchain data, released an analysis showing that the Ponzi collected 9.9 million ETH—worth roughly $1.9 billion at current prices. Of that Ethereum, over 9 million of that seems to have been paid out to “winners” of the pyramid scam.
What remains is 830,000 ETH (~$160 million), which has seen no movement since the end of June. The halt in activity coincides with the arrest of ringleaders from the scam, meaning these coins may be stuck in limbo. Deposits into these Plus Token wallets stopped around June 27, the same time the supposed scam organizers were arrested by Chinese authorities on the island of Vanuatu.
Pessimistically, other second-level ringleaders may have access to these wallets and find ways to dump the coins on exchanges. Optimistically, the arrest of the top-level organizers may mean these coins are lost forever, taking the coins out of circulation and improving the scarcity of Ether.
Given this new data, cumulatively, the Plus Token scam caused at least $4 billion in damages. This astronomical figure cements Plus Token as the third largest Ponzi scheme of all-time, handily placing it ahead of other multi-billion-dollar cryptocurrency scams such as BitConnect and OneCoin.
Are the scammers cashing out?
What’s still unclear is whether large transfers out of Plus Token-related wallets are going to “winners” or other second-level organizers inside the scheme. So far, the top 1 percent of participants were able to make-off with millions in Ethereum, each.
Below is a list of the top payout recipients and the associated Ethereum addresses.
Of these withdrawals, 48 percent of payouts went to the mainly Chinese exchange Huobi (now based in Singapore after China’s exchange ban). Other exchanges that were used for liquidating illicit funds include ZB.com at 8.0 percent and Upbit at 5.8 percent.
Depending on the nature of these withdrawals, the recipients of these funds may also be putting downward pressure on the price of ETH. If so, much more than $160 million could enter the Ethereum markets.
Watch out for scams
Cryptocurrency is still poorly understood by the public. This, when combined with the brain-melting gains seen during the bull market of 2017 and Bitcoin’s ascent to a $180 billion dollar asset class, means crypto is the perfect breeding grounds for ‘believable’ cash grabs and exit scams.
Investors need to remain vigilant. It’s easy for a company to make claims that it’s creating a “new paradigm” or “reinventing an industry.” Building a profitable startup, however, is much harder.
Additionally, firms promising retail investors returns via crypto mining, arbitrage, or algorithmic trading are likely scams. Legitimate ventures into these areas seldom solicit funding from retail investors (if they were truly profitable they wouldn’t need money from small-time investors). Ultimately, there is no such thing as a free lunch. Even Bitcoin, the safe haven among crypto veterans, is fraught with risk and volatility. Do your own research, and don’t play with money you can’t risk losing.
Ethereum’s Harmony will not support upcoming Istanbul hardfork
With the Istanbul hardfork expected to roll out by 4 December, developers of the Ethereum community have been releasing several upgrades in its ecosystem.
The testnets before the execution of the Istanbul hardfork have been activated with Rinkeby testnet being the latest one. While the community is gearing up for the Kovan testnet scheduled for December, the team lead at Ethereum Péter Szilágyi affirmed that Rinkeby was a success. His tweet read,
“The Rinkeby #Ethereum testnet is officially in Istanbul!!! :-)”
In more recent updates, Ethereum’s Tim Beiko took to Twitter to elaborate on the developments that took place in the Ethereum Core Devs Meeting #75. After the release of several versions of Nethermind, Besu, and Geth, Parity v2.5.10-stable and v.2.6.5-beta was the latest versions to be released. The release would add block numbers for the activation of the Istanbul hardfork on the mainnet along with other updates. Along with the latest versions of Parity, Aleth 1.7.0 was also released which focused on EIPs for the Istanbul hardfork.
While the developers urged the community to update their nodes, Beiko revealed that only 16% of nodes were updated.
Additionally, Beiko revealed that Harmony wouldn’t be supporting Istanbul. His tweet read,
“We also have an update from EthereumJ/Harmony to announce that they will stop maintaining their Eth1 client to focus on Eth 2.0. They will not be supporting Istanbul.”
While meeting mainly focused on Istanbul as there were no major updates pertaining to the Berlin hard fork.
Furthermore, Beiko revealed the status of Ice Age and tweeted,
“One final update, on the Ice Age! @JHancock is still looking at predicting exactly when it will hit. He will share the numbers with core developers as soon as he has them!”
Ethereum price analysis: ETH/USD attempts a recovery above $184.00
- ETH bulls engineered a recovery above the critical resistance area.
- The upside momentum has faded away so far.
Ethereum, now the second-largest digital asset with the current market value of $20 billion, has recovered from the recent low of $177.o5 and hit $184.33 during early Asian hours. At the time of writing, ETH/USD is changing hands at $183.77, mostly unchanged both on a day-to-day basis and since the beginning of Sunday.
Ethereum’s technical picture
On the intraday charts, ETH/USD has moved above SMA50 (Simple Moving Average) 1-hour (currently at $181.20) and attempted a breakthrough above SMA100 1-hour at $183.54; however, the bulls failed to keep up with the upside momentum. We will need to see a sustainable move above this handle for the recovery to gain traction. Once it happens, the next resistance of $185.00 will come into focus. This psychological barrier is strengthened by SMA200 1-hour located on approach.
On the downside, keep an eye on the middle line of 1-hour Bollinger Band at $182.30 and the above-mentioned SMA50 1-hour at $181.20. Once it is out of the way, the sell-off is likely to gain traction with the next focus on psychological $180.00 and the recent low of $177.05.
ETH/USD, 1-hour chart
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Ethereum (ETH/USD) forecast on November 18 — 24, 2019
Cryptocurrency Ethereum (ETH/USD) is trading at 179. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates the presence of a bearish trend on Ethereum. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator stripes.
Ethereum (ETH/USD) forecast on November 18 — 24, 2019
As part of the Ethereum forecast, a test of level 190 is expected. Where can we expect an attempt to continue the fall of ETH/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 142. The conservative area for sales of Ethereum is located near the upper border of the Bollinger Bands indicator strip at the level of 195.
Cancellation of the option to continue the decline in the Ethereum rate will be a breakdown of the upper border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair above the area of 230. This will indicate a change in the current trend in favor of the bullish for ETH/USD. In case of breakdown of the lower border of the Bollinger Bands indicator bands, we should expect an acceleration in the fall of cryptocurrency.
Ethereum (ETH/USD) forecast on November 18 — 24, 2019 implies a test level of 190. Further, it is expected to continue falling to the area below the level of 142. The conservative area for selling Ethereum is located area of 195. Canceling the option of falling cryptocurrency will be a breakdown of the level of 230. In this case, we can expect continuation growth.