London Daily

Focus on the big picture.
Thursday, Oct 22, 2026

Millions of people fell for crypto-Ponzi schemes in 2019

Millions of people fell for crypto-Ponzi schemes in 2019

Cryptocurrency scammers raked in $4.3 billion worth of digital money in 2019, more than triple 2018’s haul. That’s according to the latest in a series of recent data drops by blockchain analytics firm Chainalysis, all of which it has included in a lengthy report it published Wednesday entitled “The 2020 State of Crypto Crime.”

You’ve got scams: Scammers exploit the fact that so many people are still fairly unfamiliar with cryptocurrency aside from its supposed “get rich quick” potential, according to Chainalysis. The various types of scams include fake token sales, blackmail scams, and fake services that promise to “mix” a user’s coins with those of others in order to make transactions harder to trace—only to run off with the money instead.

Predation by Ponzi: But according to the new report, Ponzi schemes are the elephant in the room. These scams, which entice unwitting people to invest in a phony enterprise and then dole out profits to earlier investors using the money that more recent investors have contributed, accounted for 92% of the stolen funds. Millions of people were defrauded.

The PlusToken fiasco: Chainalysis reports that a single Ponzi scheme based in China by itself brought in at least $2 billion last year, which would make it one of the biggest ever. PlusToken was a supposed cryptocurrency wallet service that promised users high returns if they used Bitcoin or Ethereum to buy the fake company’s own token, called Plus. An elaborate marketing campaign convinced more than three million people—the majority of whom were in China, Korea, and Japan—to invest by reaching them through the popular messaging platform WeChat, holding in-person meetups, and posting ads in supermarkets.

In June, Chinese authorities arrested six people alleged to have been behind the scam, but it appears that at least one still hasn’t been caught, since someone has continued to launder the funds and even cash some of them out.

Dirty laundry: Chainalysis says the PlusToken scammers have managed to cash out at least $185 million of stolen Bitcoin, but first they tried to cover their tracks by making 24,000 transfers and using 71,000 different Bitcoin addresses. Many of those transactions were executed via a special kind of wallet that uses a Bitcoin-compatible privacy technology called CoinJoin to combine the user’s transactions with others in a way that makes it difficult to tell who sent which payment to which recipient. Much of this money eventually found its way to so-called over-the-counter (OTC) brokers, independent entities that facilitate trades between individuals who don’t want to interact with a regulated exchange.

The PlusToken scammers weren’t the only criminals who took this route. Chainalysis concludes that the activity of a small subset of “rogue” OTC brokers providing crypto-money-laundering services “skyrocketed” in 2019. The authors warn: “Regulators need to be aware of how these scams function and how players like OTC brokers fit in so that they can craft more effective consumer protection laws.” In the meantime, keep your guard up.

Newsletter

Related Articles

0:00
0:00
Close
Parliamentary Inquiry Highlights Urgent Need to Address Housing Shortage as Scottish Completions Hit Eleven-Year Low
United Kingdom and Singapore Sign Comprehensive Financial Agreement to Deepen Digital and Sustainable Market Ties
Greggs Announces Plan to Close Four Manufacturing Facilities and Cut Seven Hundred and Forty Jobs
International Monetary Fund Raises United Kingdom Economic Growth Forecast While Warning of Inflationary Pressures
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs Onto Gas to Lower Household Bills
Housebuilding Across Scotland Plummets to Eleven-Year Low Despite Government Pledges to Tackle National Housing Emergency
Greggs Announces Factory Closures Across Northern England and Scotland Affecting Seven Hundred Forty Jobs
United Kingdom and Singapore Conclude Eleventh Financial Dialogue in Singapore to Deepen Cooperation on Digital Finance and Capital Markets
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs to Gas Bills and Tap Windfall Profits to Lower Consumer Prices
British Broadcasting Corporation Announces Major Cost-Cutting Overhaul to Close Linear Broadcast Services for Television Channels BBC Three and BBC Scotland Alongside Digital Radio Station BBC Radio Four Extra
London Capital Markets Face Renewed Scrutiny After High-Profile Offerings Underperform Post-Listing
Green Party Wins Historic First Westminster Parliamentary By-Election in Gorton and Denton
Environment Secretary Emma Reynolds Unveils Sweeping Regulatory Overhaul for English Water Industry
United Kingdom Health Security Agency Confirms Thirty-Four Cases in Kent Meningitis Outbreak
Ministry of Defence Prepares Heat Pump Subsidy Cuts to Fund Urgent Military Modernization
British and European Union Officials Schedule Long-Awaited Bilateral Leaders Summit for November Twentieth
Bank of England Governor Andrew Bailey Urges Strict Fiscal Credibility to Protect British Bond Markets
United Kingdom Inflation Rises to Three Point One Percent Driven by Escalating Fuel Costs
Profit Warnings Among London-Listed Companies Reach Two-Year High Amid Global Energy Shocks
Chancellor John Healey Signals Targeted Tax Changes on Banks and London Corporate Offices Ahead of Budget
British Government Reallocates Twenty-Five Per Cent of International Climate Finance to Global Biodiversity Projects
Initial British Carbon Border Taxes Set to Undercut Parallel European Union Tariffs on Industrial Imports
Whitehall Prepares National Zero-Interest Loan Initiative to Accelerate Domestic Heat Pump and Solar Adoption
European Union Offers British Automakers Access to Hybrid Vehicle Trade Protections Subject to Strict Regulatory Alignment
British Probation Officers Threaten Widespread Industrial Action After Rejecting Five Per Cent Government Pay Offer
Microsoft Abandons Major British Artificial Intelligence Data Centre Citing Severe National Grid Power Constraints
United Kingdom Inflation Accelerates to Three Point Four Per Cent Ahead of Chancellor John Healey's Inaugural Autumn Budget
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
Senior Minister Shabana Mahmood Seeks New Law Enforcement Pact With European Union
Airbus Executive Warns Britain Risks Losing Crucial Role in European Space Industry
Exorbitant Electricity Costs Push British Steelmakers to Worst Competitive Position in Three Years
British Food and Beverage Exports to European Union Collapse by Over a Third Since Brexit
Up to Twenty English Maternity Units Face Impending Closure Due to Safety and Staffing Crises
Government Declares Severe Drought Across Southern England Following Record Dry Spell
Corporate Profit Warnings Reach Two-Year High Amid Middle East Conflict and Rising Costs
International Monetary Fund Warns Chancellor John Healey Against Proposed Bank Tax Raid
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
×