What it was
PlusToken launched as a mobile app in May 2018. A member paid in at least $500 worth of digital currency, switched on a feature the platform called the "smart dog", and was told the software would arbitrage price differences between exchanges on their behalf. Members were ranked in tiers, and were paid for recruiting the people below them.
The court that tried the case found the mechanism did not exist. As the Chinese reporting of the judgment records, the first-instance court held that the platform had no actual business operations at all, and that the advertised arbitrage function was not a function the platform had. What it had was 2,693,500 registered accounts, 1,594,900 of them identity verified, and a referral structure 3,293 levels deep.
No legal entity has been established for it, so the structure is left undocumented. The scheme spread through China, South Korea and Japan, and in January 2019 the customer service and coin distribution teams were moved to Sihanoukville, Cambodia.
The coins
An accountancy firm's forensic report, quoted in the judgment, put what members had paid in by 27 June 2019 at 314,200 bitcoin, 9,174,200 ether, 1,847,700 litecoin, 117,500 bitcoin cash, 96,000 dash, 51,363,300 EOS, 928 million XRP and 11.06 billion dogecoin. The Yancheng price certification office valued those eight currencies, using the lowest price seen between 1 May 2018 and 27 June 2019, at over 14.8 billion yuan.
On the record
On 22 September 2020 the People's Court of Yancheng Economic and Technological Development Zone convicted fourteen people, including the platform's creator Chen Bo, of the crime of organising and leading pyramid selling activities, and sentenced them to between two and eleven years in prison with fines of 120,000 to 6,000,000 yuan. A fifteenth defendant was convicted of concealing criminal proceeds and sentenced to four years and ten months. On 26 November 2020 the Yancheng Intermediate People's Court of Jiangsu Province dismissed the appeals and upheld that judgment.
The offence of conviction is pyramid selling, not fraud, and this entry does not claim otherwise. The court ordered the seized digital currency dealt with according to law and the proceeds confiscated to the state treasury. Police had seized 194,800 bitcoin, 833,000 ether, 1,420,800 litecoin, 27,668,700 EOS, 74,200 dash, 488 million XRP and 6.06 billion dogecoin from the defendants.