The potential sale of the remaining ETH from PlusToken could pose a supply overhang for Ethereum, affecting its already volatile movement in the near future.
A recent discovery by OXT Research analyst ErgoBTC has revealed that around 7,000 ETH ETH $2 057 24h volatility: 2.8% Market cap: $248.18 B Vol. 24h: $23.19 B tokens, valued at $16.7 million, tied to the notorious PlusToken Ponzi scheme have been transferred to several exchanges, including BitGet, Binance, and OKX. This development, reported on Wednesday, hints at the potential liquidation of the entire $1.3 billion in ETH seized from the scheme.
PlusToken, which defrauded millions of investors primarily in China and South Korea, was one of the largest crypto pyramid schemes, operating between 2018 and 2019 before its collapse.
The scheme, structured like a typical pyramid, promised investors monthly returns of up to 16% for a minimum $500 investment in cryptocurrencies. By 2019, over 2.6 million people had fallen victim to the scam. Local authorities eventually intervened, confiscating over $14 billion in cryptocurrencies, including Bitcoin BTC $70 424 24h volatility: 3.6% Market cap: $1.41 T Vol. 24h: $54.48 B and Ether.
Patterns of ETH Redistribution
This latest movement of Ether comes after a period of dormancy since 2021 when the wallets associated with the scheme were last active. According to ErgoBTC, the current ETH redistribution follows similar obfuscation patterns seen in 2019 with the sale of seized Bitcoin from PlusToken. This suggests a full liquidation of the $1.3 billion in seized Ether might be on the horizon.
Earlier court documents revealed that the seized crypto assets were handed over to a Chinese company, Beijing Zhifan Technology Co., which was tasked with converting the assets into cash for victim restitution. While most of the Bitcoin was sold between 2019 and 2020, a large amount of ETH remained untouched in multiple mixing addresses.
However, recent activity in August saw 542,000 ETH, valued at approximately $1.29 billion, redistributed into 294 new wallets. This week, 15,700 ETH were moved out of these addresses, with 7,000 ETH sent to exchanges.
Ethereum’s Market Struggles
Ether, which is currently trading at around $2,400, has been facing increased pressure in recent months. Despite attempts to break through the $2,700 resistance level, it has struggled amid a broader crypto downturn. Competitors like Solana have been gaining traction, further compounding Ethereum’s market challenges.
At the time of writing, the second-largest cryptocurrency sits 51% down from its all-time high (ATH) of $4,891, achieved in November 2021. Notably, Ether boasts a market cap of $289.3 billion, down by 1.2% in the past day.
Adding fuel to the debate, Bloomberg ETF analyst Eric Balchunas recently stated on X that Ethereum lacks the same security and trust as Bitcoin. However, he later deleted the post after receiving backlash from Ethereum supporters who accused him of spreading misinformation.
The potential sale of the remaining ETH from PlusToken could pose a supply overhang for Ethereum, affecting its already volatile movement in the near future.
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