China may sell $1.3B in Ethereum seized from PlusToken

The Chinese government may soon offload a significant portion of Ethereum (CRYPTO:ETH) seized from the PlusToken scam, according to reports from on-chain analysts.

Researcher ‘FreeSamourai’ shared on X that around 7,000 ETH, part of the remaining 542,000 ETH from the PlusToken seizures, was recently transferred to exchanges, indicating a possible selloff.

However, no major selloff has been confirmed yet.

The remaining ETH stash, valued at approximately $1.3 billion, could put downward pressure on spot markets if sold, adding concerns about the potential market impact.

PlusToken, a fraudulent scheme that operated between 2018 and 2019, posed as a South Korean crypto exchange but was ultimately exposed as a Ponzi scheme.

By the time it collapsed in mid-2019, the operation had amassed around 194,000 Bitcoin (CRYPTO:BTC) and 830,000 ETH from unsuspecting investors.

Chinese authorities later seized $4.2 billion worth of crypto assets related to the scheme and arrested more than 100 individuals involved.

Most of the Bitcoin has reportedly been sold, and the ETH has been gradually moved to lesser-known exchanges like Bidesk, according to blockchain researchers.

Despite earlier reports from blockchain analytics firm Lookonchain claiming that 790,000 ETH linked to PlusToken had been moved in August, Chinese analytics group EmberCN debunked the claim, stating that much of the ETH had already been sold in 2021.

The latest movements of ETH have raised concerns over potential market impacts.

At the time of writing, Ethereum’s price has fallen by 2%, now trading below $2,400.

The asset has struggled to break resistance at $2,700 over the past two months while maintaining support above $2,200.

Additional selling pressure from the potential sale of PlusToken's remaining ETH could lead to further price declines.

At the time of writing, the Ethereum price was $2,401.12.