London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

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
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
×