The Chinese authorities have arrested 27 persons in connection with their role for organizing the PlusToken scheme, which has become infamous for being one of the biggest scale bitcoin (BTC) exit scams of all time.
According to state media firm, Chinanews, the Ministry of Public Security, has reported the captures, noticing that it has now "wrecked a large global system of multi-level marketing (MLM), with strong ties in china, south Korea and abroad.
In their report, the Chinese authorities said that it started its examinations concerning PlusToken a year ago when they suspected foul play in the firm's operational model.
The headquarters of PlusToken is located in Yancheng, Jiangsu. At the time of the report, the ministry believes more than 2 million individuals invested their funds in the scheme, including a 3,000-level pyramid. The total amount lost by investors in the program is estimated to be $5.7bn.
As part of the strategy to bring down the perpetrators of this scheme, the ministry set up a team of investigators, which needed to go as far as Vanuatu, Cambodia, Vietnam, and Malaysia to find the 'brains. ',' who were supposedly working in different regions globally.
According to research published in March, the scheme had a reserve of about BTC 61,229 (USD 669m) worth of undistributed assets in its wallets.
Some traders believe that the Ponzi scheme may have caused volatility in BTC value, especially the crash that happened in March.
Source: Cryptonews
