Ethereum Price Plummets As Chinese Govt Offloads 7,000 ETH From PlusToken Seizure

The Chinese government is reportedly moving to offload massive Ethereum tokens into the market. It reportedly transferred about 7,000 ETH tokens worth over $16.7 million from funds seized from PlusToken, a multi-billion dollar Ponzi scheme.

Despite the recent move, the PlusToken-related wallet, which has remained dormant for almost three years, still contains 542,000 ETH worth $1.3 billion.

This latest transfer has sparked selloff concerns, increasing selling pressure on Ethereum's price, which has slipped into the $2,300 region.Ether has plummeted by over 2% within the past day amid the prevailing bearish trend.

Chinese Authorities Transfer 7,000 ETH, Obfuscate Previous Transactions Related To Seized PlusTokens Funds

The Chinese government recently transferred 7,000 ETH coins from seized funds of the popular PlusToken Ponzi scheme. ErgoBTC, an analyst at OXT Research, disclosed this in an October in an X post.

The analyst noted that the Chinese government's wallets associated with the seized funds have initiated some transfers after being dormant since 2021. After the recent transfer, about 542,000 ETH tokens worth over $1.3 billion remain in the wallet.

Many speculate that Ethereum's price will plummet if the government offloads these coins.

In early August, the remnants of ETH seized from the multibillion dollar PlusToken scheme awoke on-chain for the first time since 2021.

Over the last 24h about 7k ETH of the remaining 542k ETH ($1.3b) was sent to exchanges indicating intent to begin selling the remaining tokens. pic.twitter.com/tu2o7y4o4L

- FreeSamourai (@ErgoBTC) October 9, 2024

PlusToken emerged in 2018, touting itself as a South Korean crypto exchange and digital asset wallet provider. It operated a multi-billion dollar crypto pyramid scheme, ripping millions off investors with promises of high-interest accounts to its customers.

Between 2018 and 2019, PlusToken defrauded over 2.6 million users, garnering about 194,000 BTC and 830 ETH tokens.

Following the platform's increasing scamming gimmicks, the Chinese police seized many assets, including BTC, ETH, and others worth $14 billion. The authorities also arrested over 100 persons connected to the PlusToken scam.

Meanwhile, between 2019 and March 2020, the government sold almost all the confiscated BTC coins, worth about $1.3 billion. During this period, Bitcoin recorded a market cap of about $160 billion.

However, it left the seized Ethereum tokens until the summer of 2021, when it moved one-third of 840,000 ETH to the Bidesk crypto exchange and sold them.

ErgoBTC noted that the remaining ETH tokens, spread across several addresses, saw no activity until August 2024. This time, the authorities distributed 542,000 ETH worth almost $1.3 billion to 294 new crypto addresses.

ErgoBT C stated: Given the recent effort to re-obfuscate the ETH, it is unlikely that the active distribution of the 15.7k ETH moved yesterday is the last of the 540k ETH supply distribution."

Recent Ethereum Price Trend Amid Selling Pressure

Following the alleged massive offloads from the Chinese government, some observers believe the worst for Ethereum's price. Already, Ether slipped below the $2,400 region amid the recent bearish trend in the broader crypto market.

According to data from CoinMarketCap, ETH trades at $2,395. Ether has indicated a sideways trading pattern for over two months and has yet to overcome the $2,700 resistance level while maintaining a strong anchor at $2,200.

Besides the Chinese government sales, other sources are dumping ETH. According to X user @RunnerXBT, other large Ethereum holders, including Ethereum Foundation and co-founder Vitalik Buterin, have dumped significant amounts of Ethereum even as Ether-based ETFs record more net outflows.

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