How much Bitcoin does the Chinese Government own?

Chinese govt bitcoin

In November 2020, the world of cryptocurrency was shaken by news of a Ponzi scheme crackdown in China. A tweet by a Chinese journalist, Colin Wu, confirmed this news. Furthermore, his tweet indicated that the Chinese government had allegedly sold the seized loot and returned the money to the Central Bank’s central treasury. 

The PlusToken Ponzi Scheme Crackdown

Since 2019, PlusToken masqueraded as a genuine crypto exchange, even managing to fool most Asian crypto users to invest with them, they have billions worth of assorted crypto tokens in their portfolio before the eventual crackdown by the Chinese police.

The Chinese police conducted a raid and seized over $4.2 Billion in crypto. The Jiangsu Yancheng Intermediate People’s Court gave a detailed breakdown of the PlusToken case. On November 19th of all crypto coins seized by the authorities included:

  • 833,083 ETH
  • 27.6 million EOS
  • 6 billion DOGE
  • 194,775 BTC
  • 213,724 USDT
  • 487 million XRP
  • 79,581 BCH
  • 74,167 DASH

The assets were worth $2 Billion when they were deposited in the Ponzi scheme. Consequently, their value had more than doubled due to the rise in prices of all the coins in the market. The Chinese law enforcement arrested 7 people in regards to the case. Several convicts have already filed for appeals on their cases, hence the unavailability of the initial judgment on public records. Despite the arrests, people still believe that there are more perpetrators on the run. 

China’s Alleged Sale of the Seized Cryptocurrency

Although the report shared with the public didn’t clearly confirm whether the tokens were sold or not, Colin Wu, through his tweet, believes otherwise.

It’s unclear from this direct quote how they will go about processing the seized assets. Since the court mentions any potential gains from the assets will be sent to the national treasury, it’s safe to assume that they intend to sell these ill-gotten assets. 

Based on blockchain analytics, they sold most of the assets either late 2019 or early 2020 on Huobi and OKEx exchanges. This explains how the Ponzi scheme remained operational on these exchanges without the government ever freezing their assets. A crypto investor based in China; Matthew Graham confirms these sentiments, saying that there was no need for fear, uncertainty or doubt (FUD). 

However, there were still unsold assets that interested parties wondered how China would deal with them. Talks of reimbursing the affected PlusToken 2 million-plus victims but that could prove difficult. Because of the decentralized nature of most exchanges and the anonymity of the tokens, it might be hard to tie each transaction to a specific user. 

How This Looks Especially Because of China’s Stance on Cryptocurrency

If indeed China intends to sell whatever remains of the PlusTokens seized assets, they will be going against their stance on cryptocurrency. China has been going through a FUD over cryptocurrency since 2009 and keeping gains from a crypto sale would be hypocritical. For now, it’s a waiting game to see what the Chinese government intends to do with the recovered assets.