If 2018 was crypto’s Year of the Hack, cybersecurity CipherTrace’s description of 2019 as “The Year of the Exit Scam” has hit the nail on the head.
“On top of the QuadrigaCX disaster, which is updated in this report, one alleged Ponzi scheme in this quarter appears to have defrauded millions of users out of $2.9 billion in crypto assets,” the firm’s Q2 anti-money laundering report explained. “Other exit scams, such as Coinroom and Bitsane, are still under investigation and those losses are not included and this report’s total.”
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Now, it seems that 2019 will also be remembered as the year of the uncovering of PlusToken, a cryptocurrency Ponzi scheme that allegedly took roughly $2.9 billion from investors–so far, it’s been identified as the largest Ponzi scheme in crypto history, and the story is still unwinding.
What happened? Where did the money go? And can affected users expect to receive compensation (or any kind of help at all)?
Let’s back up for a moment
The South China Morning Post reported on June 29th that six individuals were arrested in connection with an unidentified cryptocurrency scam. However, rumors quickly spread on China’s social media platforms that the scam was a self-described cryptocurrency wallet scam known as “PlusToken.”
3/ The #PlusToken scam is alleged to have been ended by #Vanuatu Police on the 27th of June. According to reports in Chinese media on the 1st of July that showed photos of some of the suspects arrested in Vanuatu & the alleged ring leader in China who was reported to be at large. pic.twitter.com/9knaWlSzIa
— DLT Vanuatu (@DLT_Vanuatu) July 14, 2019
But when can we expect a shutdown? Well, if the past is any indication of the future, then justice won’t be served anytime soon–more than a year passed in between the time that BitConnect was identified as a scam within the space until law enforcement began taking action against BitConnect in various corners of the world; public suspicions that PlusToken may have been a scam seem to have originated around September 2018.
(And, interestingly–although BitConnect ultimately shuttered its doors in January 2018, a number of individuals formerly associated with BitConnect were arrested in India in connection with yet another Ponzi scheme in July of this year.)
What can affected users do? Since BitConnect shut down last year, the FBI has posted a voluntary survey that victims of the scheme can fill out in order to inform law enforcement of the fact that they were victimized, but there really are no guarantees of help or compensation.
The unfortunate fact of the matter is that in spite of the fact that law enforcement may have taken action against PlusToken, there simply isn’t very much help out there for the individuals who fall victim to cryptocurrency scams of any flavor.
While victims of hacks, Ponzi schemes, and exit scams could call their local police (who could potentially direct them to another law enforcement agency that may be able to help), there aren’t many options out there; searching the internet for help with Ponzi schemes and other kinds of cryptocurrency scams reaps scant results, if any at all.
Given the scale of the PlusToken scheme, law enforcement agents could have an opportunity to improve the way that crypto scam victims are assisted–only time will tell.