CryptoQuant CEO reveals that China sold 194k Bitcoin from the PlusToken scheme

The CEO of CryptoQuant, Ki Young Ju, has claimed that China may have sold 194,775 Bitcoin (worth approximately $20 billion) seized from the PlusToken Ponzi scheme back in 2019. In a recent post, Ju analyzed CryptoQuant’s data on the Bitcoin reserves that were confiscated by Chinese authorities, and he suggests that they have likely been sold, despite the Chinese government’s assertions that the seized Bitcoin was moved to the national treasury.

According to Ju, the PlusToken Bitcoin trove has been involved with mixers (crypto obfuscation services) and sent to various Chinese exchanges, such as Huobi. This, he believes, indicates that China did not simply hold onto the Bitcoin but likely sold it in order to profit. His suspicion is based on the government’s use of mixers and multiple exchanges, actions typically not associated with long-term storage of assets but with liquidating them.

In his post, Ju highlighted the contradiction between the Chinese Communist Party’s claim of moving the seized Bitcoin to the treasury and the actual movement of the funds through mixing services and exchanges. He states, “A censored regime holding censorship-resistant money feels unlikely,” further emphasizing that such actions suggest China’s authorities likely chose to sell the Bitcoin instead of holding it as an asset.

This is not the first time there has been speculation about China selling the PlusToken Bitcoin. In July 2024, journalist Colin Wu claimed that China sold some of its seized crypto holdings through Beijing Zhifan Technology, alleging that much of the seized Bitcoin was sold between late 2019 and mid 2020. These reports support Ju’s conclusions regarding the Chinese government’s probable intent to sell the Bitcoin instead of storing it.

To understand the full picture, it’s essential to look at the origins of the PlusToken Ponzi scheme, which was shut down by Chinese authorities in 2019. This scheme defrauded approximately 2 million investors, accumulating over $5 billion in value, primarily through investments in Bitcoin, Ethereum, Ripple, Bitcoin Cash, and Dogecoin. The Chinese authorities seized a large portion of these assets, including 194,775 BTC and 833,083 ETH, among other digital currencies.

The Chinese government has maintained a strict stance on cryptocurrency, having banned both crypto trading and mining activities within the country in 2021. Despite this ban, Chinese citizens have continued to engage in cryptocurrency trading, as it remains technically legal to hold crypto in the country. According to Chainalysis data, from July 2023 to June 2024, the Chinese crypto market processed nearly $50 billion in transactions, showing the continued demand for digital assets despite regulatory hurdles.

In summary, the CryptoQuant CEO’s claim that China has likely sold the PlusToken Bitcoin aligns with the historical movement of these assets through mixers and exchanges, as well as the broader context of China’s crypto policies. While the government has not publicly acknowledged whether it sold or stored the seized Bitcoin, Ju’s analysis points to the likelihood of a sale rather than long-term holding. This could have significant implications for the market, especially considering the sheer volume of Bitcoin involved.