Chinese Judges Begin Sentencing PlusToken Bitcoin, Ethereum Scam Chiefs

Judges in China have been handing out penalties to some of the individuals charged with masterminding the PlusToken crypto scam – a Ponzi scheme that reportedly sucked in some 2 million investors.

Per the Chinese prosecution service’s news outlet, via Xinhuanet, 16 individuals of varying seniority within the PlusToken hierarchy were last week handed fixed-term jail terms, with the most senior PlusToken orchestrator set to serve at least 11 years behind bars. Other individuals, none of whom were named in full for legal reasons, were handed lesser terms, with one more junior member handed a two-year fixed-term jail sentence.

The court heard how the PlusToken leadership accrued some USD 7.3bn worth of crypto and cash funds, mainly in bitcoin (BTC) and ethereum (ETH).

Three individuals, referred to by the court and the media only by their surnames (Chen, Ding, and Peng), used investors’ stakes to fund their own spending sprees and pay for their own bills, prosecutors told the court.

They also explained that the three individuals pooled their individual expertise to create a powerful and highly convincing façade: Chen used his own business acumen to give PlusToken the look and feel of a multinational company. Peng, meanwhile, has experience of multi-level marketing (MLM) promotion and had previously been convicted of MLM-related fraud offenses. And Ding was described as having “resources in the blockchain sector” and a deep understanding of blockchain technology.

The court also heard how the PlusToken chiefs had promised investors that using BTC or ETH stakes of USD 500, they could expect to earn up to 18% in passive income per month. Bringing more recruits in would result in yet bigger payouts, the scammers had told investors.

Prosecutors explained how they were finally able to track down some of the masterminds – by following a trail that led to a wallet holding BTC 450 (USD 4.9m)

Ding refuted the charges, claiming that he was unaware that PlusToken was being run as a pyramid scheme. However, prosecutors convinced the court that the story was a fabrication, using WeChat chat app records of conversations between Ding and Chen as proof of his guilt.

The former was issued a jail term of almost nine years, as well as a fine of over USD 586,000.

Chinese police finally put an end to the PlusToken scam in July this year, claiming they had “completely destroyed” its network – and making 27 arrests. Hearings are still ongoing.
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Learn more: PlusToken Scam Still Has BTC 61,229 Undistributed – Report