Opinion: Sale of confiscated PlusToken coins worth $4.2 billion — FUD and nothing more

Chinese authorities have already sold most of the cryptocurrency seized in the investigation into the PlusToken pyramid scheme, worth $4.2 billion. The market should not be worried, says Matthew Graham, head of Sino Global Capital.

hmm my interpretation was *mostly* sold but yes, there’s no need for FUD, agree https://t.co/NAq5iSRoXz

— Matthew Graham (@mattysino) November 27, 2020

On November 27, ForkLog reported that Chinese authorities had at their disposal 194,775 BTC, 833,083 ETH, 1.4 million LTC, 27.6 million EOS, 74,167 DASH, 487 million XRP, 6 billion DOGE, 79,581 BCH and 213,724 USDT. Under the law, its sale was anticipated, but details were not specified.

The news surfaced at a moment when Bitcoin price tested support at $17,000, while just two days earlier it reached this year’s high above $19,000.

Matthew Graham’s view is shared by Ergo from OXT Research. Based on on-chain activity of PlusToken pyramid addresses, he concluded that the seized coins had previously passed through mixing services and were sold through Huobi and OKEx.

Analyst David Puell, drawing on these data, presents his calculations:

• Of the 201,000 BTC in Chinese authorities’ possession, 30,000 coins remain;
• A more likely scenario is 15,000 of the 30,000;
• 170,000 BTC had previously been sent to exchanges.

4/ @ErgoBTC‘s balances as of today stand as follows. I quote:

«Here are my numbers:
~201k BTC total post shutdown.
~170k sent to exchanges.
~Calculated remaining coins ~30k (but I am missing some exchange flows).

Best estimate of remaining coins […]: ~15k.»

— David Puell (@kenoshaking) November 27, 2020

«The sale of confiscated PlusToken coins was conducted from mid-2019 to late-2019. This was the main reason for Bitcoin’s price drop from $14,000 to $6,000 during that period. Ergo shared these observations a year ago, and now the Chinese government has confirmed them», — writes the analyst.

8/ Takeaways from this:

a. It was extremely interesting to see that on-chain research allowed @ErgoBTC and people in the on-chain analytics field to call this almost a year and half before the Chinese government confirmed this to the media.

— David Puell (@kenoshaking) November 27, 2020

Puell sees in these actions an unsuccessful attack by Chinese authorities on Bitcoin.

10/ d. Most importantly, this can be seen as the first government attack toward Bitcoin via liquidity games and price manipulation. IT FAILED.

— David Puell (@kenoshaking) November 27, 2020

Earlier this year, ForkLog reported that 11,999 BTC moved from the PlusToken cluster.

How the PlusToken pyramid launders bitcoins and how this affects the price?

In addition to news about plans to sell the confiscated PlusToken cryptocurrency, pressure on Bitcoin’s price last week was fueled by rumors that the U.S. Treasury intends to require financial companies to verify owners of non-custodial wallets before withdrawals.

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