PlusToken: a pyramid scheme of 2.6 million participants and the largest crypto seizure in history

In China in 2018, a project was launched that gathered millions of participants within a matter of months, promising profits through a sprawling referral system with thousands of nested levels. PlusToken positioned itself as a cryptocurrency wallet with a built-in investment tool, but in reality it was one of the largest pyramid schemes in the history of cryptocurrency — and at the same time the subject of one of the largest asset seizures ever carried out by law enforcement.

The project was launched by the entrepreneur Chen Bo in early 2018, built around a referral program with an extraordinarily deep structure — according to investigators, it comprised more than 3,200 levels of recruitment. Participants deposited cryptocurrency in exchange for membership and a promise of profit, but the actual income came not from trading activity but from the deposits of new participants, who were lured by the prospect of earning money by recruiting others.

The scheme spread rapidly across Asia until it began to collapse in 2019 — withdrawals stopped, and the organizers disappeared with millions of dollars in cryptocurrency. At that point, investor losses were estimated at between $2.25 and $2.9 billion.

In July 2020, Chinese police arrested 109 people involved in organizing the scheme, 27 of whom held leadership positions. In December of that year, a court in the city of Yancheng, Jiangsu Province, found Chen Bo and thirteen other key organizers guilty and sentenced them to prison terms ranging from two to eleven years, along with fines ranging from $18,000 to $900,000.

A notable feature of the case was that, by the time the assets were actually seized, the price of the confiscated cryptocurrencies had risen substantially compared with the moment the scheme collapsed: law enforcement seized assets worth roughly $4.2 billion by then — one of the largest crypto seizures in the history of law enforcement.

Published 1 November 2022