PlusToken recently moved $ 186 million worth of Ethereum tokens, causing investors to fear a drop in the Ethereum price.
PlusToken sales lead to correction
Earlier this week, PlusToken attempted to move 789,500 ETH. However, the movement of these stolen funds was temporarily stopped due to congestion problems within the Ethereum network. PlusToken is known as one of the biggest scams in the crypto world.
The $ 186 million transfer came from a known Ethereum address. It was later split into 50 different transactions, possibly as an attempt to keep the activity undetected. Just two days before this development, PlusToken also moved $ 67 million worth of stolen EOS tokens.
Despite PlusToken being unmasked last year, PlusToken still causes damage to the crypto industry by holding and selling large amounts of Bitcoin and other assets like Ethereum and EOS.
PlusToken still has a significant number of stolen crypto coins and that is causing a problem. These funds continue to pose a threat to spot markets, as large sales can significantly affect the price of the coins.
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Drop in prices
As crypto options and futures become more and more popular, the danger of a fall due to such a large sale increases. This is because the spot market is then even more influenced by the scammers.
Kim Grauer of Chainalysis agrees that a sale caused by PlusToken is a real risk. Grauer said:
“We have found in the past that large influx of currencies into exchanges, such as last year’s PlusToken, tend to increase price volatility on exchanges. This issue may have been compounded by trading bots. Trading bots can pick up the movements in the chain and execute transactions. Not to mention the leveraged positions on derivatives exchanges that can be liquidated fairly quickly. In general, however, prices bounce back quickly after those one-off events. ”
Exchanges increase security to ward off scammers
In this case, the Ethereum network acted as a temporary bottleneck for the scammers as the transaction stalled due to network congestion, which is ironically a minor bright spot in the current scalability issues facing the ETH blockchain.
However, the biggest deterrent to the liquidation of PlusToken funds should be the exchanges’ KYC (know-your-customer) standards.
KYC requires users to reveal their identities. This, if done properly, can lead to the arrest of the person or people selling the assets. As previously reported, a large proportion of the Bitcoin sales carried out by PlusToken took place in the Huobi and Okex exchanges. Here, the KYC and AML policies were not enough to stop the scammers.
Huobi has worked to improve its security standards since the last wave of Bitcoin sales. The exchange recently launched an on-chain monitoring tool called Star Atlas. This was done to identify “crimes such as fraud, money laundering and other problematic activities” on their platform.
Peer-to-peer exchange Paxful also recently collaborated with Chainalysis to improve the monitoring of illegal transactions.
It is difficult to say what the PlusToken scammers will do next. However, as a trader you will have to keep a close eye on the Ethereum options and the spot price on exchanges in the coming period.
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