Analyst: Multi-billion dollar PlusToken scam could be what caused Bitcoin's drop to $6,600

Back in August, CryptoSlate warned readers that perpetrators of the PlusToken scam could flood the market with stolen BTC and tank prices as they make their exit.

The analyst dug deep into PlusToken's Bitcoin holdings, as most public reports estimated the company held around 200,000 BTC. After accounting for hidden funds and mixed coins, the analyst found the company held around 187,000 BTC. Nonetheless, he said a separate cluster of addresses caught self-transferring funds could increase this number significantly.

A single address, which is a suspected change collector for making BTC payments to Huobi, has liquidated more than 22,000 BTC in November alone, averaging at little over 1100 BTC per day.

If all of the addresses the analyst found associated with PlusToken continue dumping their BTC at the same pace, there's very little chance that BTC will be able to remain above the $6,000 level.

According to Ergo's estimates, there are still around 58,000 BTC in unmixed coins currently in addresses associated with PlusToken.

After CNY 2019 PlusToken on-ramp spike up significantly in Mar and Apr.

With Huobi being the exchange where most of PlusToken's BTC was liquidated, many pointed out that it seems hard to believe that the exchange hasn't been aware of the huge influx of bitcoin in the past few months.

Built on the ruins of BitConnect, PlusToken has taken the Asian market by storm, reportedly taking in as much as $3 billion in various cryptocurrencies, including BTC and ETH. The mobile wallet was promoted across South Korea and Southeast Asia as a crypto custodian that promised 6 to 18 percent monthly returns through arbitrage, trading, and mining.

The pyramid scheme meant PlusToken was making money by paying old investors with money from new investors.

While six of PlusToken's leaders were arrested back in July, the exit scam continued throughout the summer and will most likely continue into 2020 if major exchanges such as Huobi fail to implement measures that would stop the liquidations.