PlusToken Exit Scam, The 3 Billions and CloudToken

On June 27th, PlusToken users claimed they cannot withdraw funds from their wallet. The price rate of PLUS’s internal token has not change since June 29th.

Investors now assume that the creators of the PlusToken have escaped with their assets. The worth of these assets is estimated at 3 billion dollars. At the moment there are no official reports from the authorities regarding the situation.

PlusToken’s Early Days

I guess it is time to for a quick history lesson on PlusToken.

• The project launched in 2018 as a decentralized and international crypto project which had the support of a South Korean team.
• There were also media reports, that the wallet was developed by the Chinese company Jiaxing Zhejiang(the name of the company doesn’t appear on China’s yellow-pages).
• CEO of PlusToken was only known as LEO(?). No one knows his real name.
• The project was mainly advertised and hyped by “investors” in China and Europe.

By reading the above key points we can understand that something is off about the project.

The Scam Strategy Until the Exit

So, how exactly you start a good scam on the internet with a crypto background? Well you need three things. First a CEO as main investor to inspire trust. Secondly, you will need some guys to create a product that seems normal to regular people. Third and last, you will need to have some people generally known by others as investors and entrepreneurs.

And there you have it, the ingredients to start a scam project. Now all you have to do is to find a place to cook, meaning a country which will not bother you until you do the exit scam.

Early Investors Stage

Now you need a legit looking website with a whitepaper. That’s all you need to start building the level 2 of the pyramid scheme and start getting money. Let’s call this level 2 the Early Investors Level. You will be astonished by how many people are giving away their money to projects which they do not have a working product or a working use case.

The Early Investors Level, is vital to the scam’s continuation, as in this level the scammers are accumulating a lot of money which they can use on a later stage for advertisement and marketing purposes to attract more people and extend the levels of the pyramid.

Kick Starting the Network Effect

In our case, PlusToken “succeeded” pretty soon in the early investors level, mainly because they started of in China which has 1.4 Billion people. In a country with that many people you can easily find a few thousands who will invest and support a scam project mostly out of their naivety.

Now it is time to send the ravens out. In this case, the ravens sent to Europe to pursue new big investors as well as making the Level 3 of the ponzi scheme even stronger by gathering more small-time investors to use them for affiliate marketing.

Meeting With An Investor Of PlusToken

Some of the information you will read below coming from real conversations with an investor of PlusToken. His name won’t be mentioned in the article for obvious reasons.

This is the part where I happened to meet a person, at the mobile and computer repair shop I worked at that time, who introduced himself as an investor and entrepreneur in the crypto-space. I was interested in this guys success story so I tried to contact him, but with no luck as he ignored my messages. The above event happened the summer of 2018 and he also mentioned PlusToken, a “great project of the future”.

After that I lost interest and didn’t really bothered with him again. Funny thing is that we stayed friends on Facebook. That bring us to this summer where I saw a post on Facebook about PlusToken and I commented that it is a total scam.

1-2 minutes after the comment I received a private message from the man I met the previous summer. He was asking me, why I commented something like this. The man who ignored my messages now sent me to ask me for explanations about my comment, as at the same moment he deleted my comment on his post.

I kindly explained him that I am into the space for years and I can’t fall for a petty scam like this. Then the conversation became friendlier and he started saying all kind of motivational things and quotes about taking your life onto your hand, believing in your dream and investing in “technology of the future”. But the more I was talking to him the more I realized he doesn’t know much about the crypto-space.

We closed the conversation in a friendly manner as he told me he wanted to have dinner with me to talk more. I replied positively and after a week or two he sent a message to arrange the time and place of the dinner. I accepted his request as I wanted to know his “investing views”.

We met to a restaurant by the sea and discussed various subjects for at least 2 hours. When the talk turned in the projects he was investing, he didn’t discussed about PlusToken and instead, he was talking about CloudToken.

After the long talk we shook hands and left the restaurant. When I got back to my house I started researching CloudToken. It was a clear ponzi scheme again. The project was pretty much a copy of PlusToken in terms of the pyramid structure. I decided to not continue on my research solely because there was not point on researching something that scammy.

A few days later, the man I met on the restaurant messaged me again and he tried really hard to persuade me to invest into more scam projects. I kindly said that I am only into Bitcoin and legit cryptocurrencies with real use cases. After that he never contacted me again.

The Stage of Greed: Recycling the Scam Projects

Today, a month after PlusToken’s creators vanished with 3 billion dollars, the same guys who were supporting PlusToken now shifted their support onto the next scam, CloudToken.

This is what I call The Stage Of Greed. CloudToken launched on Arpil 2019 a few months before the PlusToken’s exit scam. The fascinating thing is that CloudToken had already been advertised a lot 2-3 months before its launch. This fact indicates that they already had enough money to pre-advertise the new scam project.

Reaching The Stage of Greed never had a good ending. It is really interesting how things with CloudToken will eventually play out. On a personal view I believe they will get caught before they exit scam.