According to Chinese reports, another crypto scam has taken place this week, which is similar to the Plustoken platform. Over 700,000 users have been scammed by Dubbed WOTOKEN, and it has stolen a crypto worth over $1 billion.
New Chinese SCAM: WOTOKEN
According to the report, on 14 May, the trial in the court of Binhai Country, Yancheng City began, and there were 6 people on the jury of the defendants, who are said to have been involved in this project. The accusation concerns the organization and management of the so-called financial pyramid, and the defendants were also supposed to use false stories to promote platform, hide income and other crimes.
The Chinese authorities first learned about WOTOKEN in August 2018. The defendants had various responsibilities. Some of them were involved in organising, recruiting staff, setting up false platforms and organising advertising campaigns.
WOTOKEN did not perform any business activities, however, it was promoted as a smart cryptocurrency wallet, which generate profits without any user involvement.
Due to the type of MLM activity offering quick profits, as well as marketing promoting the project as a cryptocurrency wallet, this platform is compared to another scam, PlusToken, which also originated from China. Besides that, according to Dovey Wan, one of the defendants was also involved in PlusToken project.
According to a Chinese report, WOTOKEN functioned as a classic financial pyramid project from July 2018 to October 2019. What could draw users' attention and convince them that this is a scam is a surprisingly high hierarchy of 501 levels.
$1.1 Billion of Cryptocurrencies Stolen
During the operation period , 715 249 people registered on the platform. WOTOKEN stolen 46 thousand bitcoins, more than 2 million ethereum, 292 thousand litecoins, 56 thousand bitcoin cash, 684 thousand EOS, and several other smaller cryptocurrencies.
Eventually, according to the report, the total stolen amount was almost $1.1 billion.
Due to the criminal record of some of the offenders, they may be sentenced to various sentences. They all received a fine, the amount of which was not disclosed, and for their crimes they can spend from 6 months to 11 years behind bars.
Due to the fact that the trial is very complex, after a 6 hour trial, the court suspended the meeting on 14 May and the case will be continued next week.
PlusToken was probably the main reason for the huge drop in the price of bitcoin in March 2020, when bitcoin fell to its lowest price levels for many years. On 12 March 2020, the first cryptocurrency noted a drop of over 50% to below $4,000 level.
Whether the new Chinese spam will have the same devastating effects as PlusToken will still be revealed.