CryptoQuant CEO Ki Young Ju believes China may have already sold the 194,000 Bitcoin (BTC) seized from the infamous PlusToken scam in 2019.

In a Jan. 23 post, Ki shared on-chain data indicating that the confiscated assets were mixed and distributed to crypto exchanges, including Huobi, rather than being retained in the national treasury.

On-chain analysis

The PlusToken scandal, one of the largest crypto Ponzi schemes, resulted in Chinese authorities seizing substantial Bitcoin reserves. Official statements from the Chinese Communist Party (CCP) claimed the funds were “transferred to the national treasury” but did not clarify whether the assets were sold.

Over $2 billion in Bitcoin was funneled into scam wallets during the PlusToken era before its collapse in 2019. The subsequent seizure by Chinese authorities raised questions about the fate of the recovered funds.

Ki argued that the movement of these coins through mixers and exchanges suggests they were liquidated. He added:

“There’s no point in using mixers and multiple exchanges if they didn’t sell it.”

Blockchain data highlighted by Ki corroborates the flow of Bitcoin from PlusToken wallets to exchanges during the second half of 2019. The analysis shows an influx of funds, suggesting that the coins were converted to fiat currencies at the time.

According to Ki:

“A censored regime holding censorship-resistant money feels unlikely.”

Top Bitcoin holder

Despite the CCP’s lack of transparency, China is still officially listed as holding 194,000 Bitcoin, according to recent data on government and country-level holdings. This figure positions China as one of the largest Bitcoin-holding entities globally.

However, Ki’s insights challenge the credibility of this claim, arguing that the absence of updated CCP disclosures aligns with the on-chain evidence of a sale. CryptoQuant’s interflow analysis suggests the coins were mixed before reaching exchanges, a practice typically associated with liquidation.

Ki said:

“I trust on-chain data, not the CCP.”

If true, the revelation could have implications for China’s perceived crypto strategy. While Bitcoin is considered censorship-resistant, the likelihood of the CCP retaining large amounts of the asset appears slim.

Industry experts say the liquidation of such a significant volume of Bitcoin could have contributed to market movements in 2019. The fate of PlusToken’s seized Ethereum holdings remains unclear, adding another layer of uncertainty to the CCP’s approach to confiscated digital assets.

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