$1.3 Billion in PlusToken Ethereum Could Soon Hit Exchanges

As much as $1.3 billion worth of Ethereum (ETH) seized from the infamous PlusToken Ponzi scheme could soon flood the market, according to recent on-chain data. The potential liquidation of these assets is raising concerns about the effect on Ethereum’s price. Especially as some of the funds have already made their way to major cryptocurrency exchanges like BitGet, Binance, and OKX.

PlusToken Funds on the Move

OXT Research analyst Free Samourai tweeted Wednesday that Ethereum linked to PlusToken has begun moving to exchange addresses. Out of the 542,000 ETH seized by Chinese authorities, approximately 7,000 ETH ($17.2 million) has already reached exchange wallets, hinting that large-scale liquidations may be imminent. Currently, Ethereum is trading around $2,448, down 1.5% on the day, according to CoinGecko data.

The PlusToken Ponzi scheme, which operated between 2018 and 2019 in China, attracted 2.6 million participants before authorities dismantled it. The operation resulted in the seizure of massive cryptocurrency reserves, including over 830,000 ETH. The remaining ETH—about 542,000—was consolidated into 294 separate wallets and started moving again in August 2024.

Fears of a Market Impact

Blockchain analyst Free Samourai noted that a total of 15,700 ETH was recently transferred out of PlusToken’s addresses, with over 7,000 ETH landing in exchange deposit addresses. The movement of these funds suggests a looming sell-off, which could trigger significant sell pressure and further strain Ethereum’s price. Calvin Ferreira, head of ecosystem and growth at Bitcoin layer-2 network BitcoinOS, echoed this concern. Stating that any substantial liquidation could “dramatically increase selling pressure” and lead to a further decline in Ethereum’s market value.

Ethereum’s Price Under Threat

With $1.3 billion worth of Ethereum potentially hitting the open market. The timing and scale of these transactions could significantly impact liquidity and market sentiment. Anmol Jain, head of investigations at AMLBot, noted that the market’s response will depend on the pace of these transfers and broader market conditions. If the liquidations are staggered, the impact might be softened, but if the sales happen rapidly, Ethereum’s price could plummet.

The PlusToken case also involved the seizure of a wide range of other crypto assets, including Bitcoin (BTC), Litecoin (LTC), XRP, and DOGE. In 2020, Chinese authorities transferred a portion of these assets to Zhifan Technology for liquidation. Intending to compensate victims of the Ponzi scheme. However, some of the seized Ethereum remained untouched until recently, with 542,000 ETH still at play.

As the PlusToken Ethereum begins to move onto exchanges, crypto investors and traders are bracing for the potential market fallout. The sheer scale of the $1.3 billion ETH sale could lead to increased volatility in the short term, and market observers are watching closely for any further moves from these addresses. Whether the liquidations will be gradual or swift remains to be seen, but the market is undoubtedly on alert for the next steps in this long-running saga.