Recent Chinese reports indicate that a new cryptocurrency scam, resembling the notorious PlusToken, has been brought to trial this week. Dubbed WOTOKEN, allegedly scammed over 700,000 users and absorbed more than $1 billion worth of Bitcoin and other digital assets.
The New Chinese Threat: WOTOKEN
According to local reports, the trial began on May 14th in the People’s Court of Binhai Country, Yancheng City, against six defendants allegedly operating the WOTOKEN project. More specifically, the court blamed that they organized and managed multi-level marketing (MLM) activities, covered up false stories, provided misleading information, and concealed income, and even crimes.
Moreover, Chinese authorities first learned about the WOTOKEN project in August 2018. All defendants had different responsibilities within the organization, from recruiting technical personnel and setting up the fraudulent platforms to creating online and offline attractive promo campaigns.
The platform operated without any actual business activities. Instead, the suspicious marketing messages claimed that it worked as a smart online wallet for cryptocurrencies that generated automatic profits for users without their involvement.
Due to its MLM-based operations and claiming to produce quick profits as a crypto wallet, WOTOKEN is compared to another sizeable fraudulent scheme, PlusToken, which also came from China. Besides, popular industry commentator Dovey Wan said that one “core criminal involved in WOTOKEN is formerly key scammer at PlusToken.”
Over $1 Billion Stolen Digital Assets
Per the report, WOTOKEN functioned from July 2018 to October 2019. It worked as a classic MLM project, but it had a suspiciously high number of total hierarchical levels – 501.
Within that period, 715,249 people registered on its platform. WOTOKEN absorbed from them 46,000 bitcoins, over 2 million ethers, 292,000 litecoins, 56,000 BCH, 684,000 EOS, and large quantities of several other less known digital assets.
Ultimately, the report calculated that the total amount the fraudulent project raised from its members equaled 7.769 billion yuan (nearly $1.1b).
Some of the defendants already had criminal pasts; hence they could receive different sentences. While the prosecution had requested all of them to pay an undisclosed fine for their actions, the jail time may vary from six months to eleven years, the report outlined.
However, due to the complexity of this trial, the court suspended the case after six hours on May 14th and will continue next week.
In regards to the price of Bitcoin, PlusToken was named as one of the major reasons for the March 2020 declines, which resulted in the worst day Bitcoin had seen in years. On March 12, 2020, the primary cryptocurrency plunged over 50% to its current year to date low at $3600.
Whether if WOTOKEN will carry a similar devastating price effect, it is yet to be seen.