$5 Billion Crypto Selloff Associated with PlusTokens’ ‘Scammers’

$5 Billion Crypto Selloff Associated with PlusTokens’ ‘Scammers’

The price of most top cryptocurrencies plummeted yesterday. Bitcoin dropped below the $7,000 mark for the first time in three weeks, and Ethereum lost 7% of its value. Overall, the crypto market lost about $5 billion within a short while.

Per blockchain data analysis firm Chainalysis, The selloff, could have been caused by those behind the PlusToken.

Chainalysis’ report claims they still controlled 20,000 BTC (now about $137 million) and 790,000 ETH ($102 million). Six people associated with PlusToken have so far been arrested and extradited to China from Vanuatu, where it’s being claimed they ran a Ponzi scheme.

According to Chainalysis’ report, about 25,000 BTC ($171.4 million) associated with PlusToken has been cashed out since April 2019 via over-the-counter (OTC) brokers.

Per the report:

“As we hypothesized, spikes in on-chain flow to OTC brokers correlate with drops in Bitcoin’s price. There can be a lag, as Bitcoin that is moved on-chain to an exchange is not immediately traded.”

Though not yet completely clear that PlusToken cashing out was behind yesterday’s price movement, an OTC trader speaking to CoinDesk steered to the report when queried about the drop in crypto price.

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