Authorities in Jiangsu province seized $4 billion in cryptocurrencies in a Ponzi scheme bust, court filings showed. The US spy chief alerts regulators about China’s crypto dominance. Outflows from Okex reached $482 million in Bitcoin after it resumed withdrawals. Crypto mining rig maker Canaan reported a 400% surge in losses.
The $4 billion bust
Authorities in Jiangsu province seized more than $4 billion in cryptocurrency in a crackdown on Plustoken, a Ponzi scheme.
According to a court filing dated Nov. 19 first and reported on Friday, authorities in Jiangsu seized 194,775 bitcoins; 833,083 Ether; 487 million Ripple; 79,581 Bitcoin Cash; 1.4 million Litecoin; 27.6 million EOS; 74,167 Dash; 6 billion Dogecoin; and 213,724 of the stablecoin Tether.
More than 2 million people were swindled out of RMB 50 billion ($7.59 billion) from the Plustoken scheme during its two years of operation.
A total of 15 people have been convicted so far in relation to the scheme, the court filing said, with fines ranging from $100,000 to $1 million and prison sentences from two to 15 years.
One of the members also laundered RMB 145 million, most of which was spent by the Plustoken team and their families on expensive cars, real estate, and insurance packages in Hong Kong, the filing said.
In total, 109 of Plustoken’s core members have been arrested, according to local media reports (in Chinese). Some had initially fled to the Pacific island nation of Vanuatu, where the scheme was allegedly active.
The latest court filing said the Ponzi scheme started in May 2018 by promoting a fake cryptocurrency trading platform. Investigations into its operators began in 2019.
The first ruling on the case came on Sept. 22 by a low-level district court in the city of Yancheng in Jiangsu. The latest ruling rejected appeals and is final. (The Block)
US crypto concerns
The Trump administration’s Director of National Intelligence, John Ratcliffe, sent a letter to the chairman of the US Securities and Exchange Commission, Jay Clayton, earlier this month, warning of China’s influence over digital currency technology, the Washington Examiner reported.
Ratcliffe said that China holds significant power over cryptocurrencies because it has the world’s biggest mining capacity, the computational process by which new cryptocurrencies are minted. He also warned that the US has been left behind in the race to a central bank digital currency as China is already piloting its own.
Ratcliffe proposed to have a team of “senior economic intelligence officials” brief Clayton, the report said.
Cryptocurrency exchange Okex saw 24,631 Bitcoin ($482 million in Tuesday’s prices) leave its platform when it resumed withdrawals on Nov. 26 after pausing for nearly six weeks, Coindesk reported using data from crypto intelligence site Cryptoquant.
This is the largest outflow the exchange has seen since March, when Bitcoin markets were in free fall.
Okex halted withdrawals suddenly on Oct. 16 when one of the exchange’s key holders became “out of touch” because he were assisting with a government investigation.
The exchange’s founder was released by authorities on Nov. 20 after being held by authorities for weeks while he was cooperating with an investigation. It is unclear whether he was the key holder who was missing.
Canaan reports losses, again
Crypto mining rig maker Canaan’s losses widened by 400% to $12.7 million quarter on quarter in the three months ending September 30, 2020, its earnings report said. The disappointing results are made even more bleak by the fact that Bitcoin prices have risen by 30% in the same time period, and Canaan has reduced its product prices by almost 69%.
The TV blockchain
China’s National Television and Radio Authority released a white paper in collaboration with privacy-focused blockchain company Arpa to outline the potential applications of blockchain in media.
The white paper aims to”introduce the traceability, authenticity, and security of blockchain in radio, television, and other media,” Arpa said in an announcement. (Arpa on Medium)
The traceability project
Vechain, a Chinese blockchain company that works closely with government officials, released insights on its food traceability program with Walmart. It said that it expects the government to soon release a food traceability system to build trust after the Covid-19 pandemic.
The company rolled out a blockchain-based food traceability platform at Walmart China in June 2019. Consumers can scan QR codes on products to find out information about them. The data are compiled from different parts of the supply chain, and are stored on an enterprise blockchain.
The platform has been updated seven times, Vechain said, to connect with local government bureaus.
Videos to watch
- TechNode hosted an online panel to discuss the global expansion of the BSN with three experts from Shanghai, Singapore, and Hong Kong .
- An “old lady” talks about decentralized finance eloquently while she is promoting an allegedly fraudulent project.