China confiscates $4.2 billion in cryptocurrecies
Already many investors of all calibers are backing their companies’ assets in bitcoin, and are treasuring the cryptocurrency; in addition they are giving encouraging forecasts taking into account all the cycles that bitcoin has had. In China this week a fact was known that gives a lot to think about the accumulation and use of cryptocurrencies in few hands. This is another of the news of the possible because the price of bitcoin had a decrease this week.
Since 2017 in China it is not legal to operate cryptocurrencies. People who do so do so through a parallel market, via VPN so as not to be blocked by the IP. This week it was learned that Chinese police have seized more than $4.2 billion in cryptocurrency from PlusToken, a pyramid scheme detected by the Chinese government. Plustoken attracted more than 2 million members. It brings together an extremely large number of cryptosystems among all investors, taking into account that it occupies 1% of all bitcoins in circulation.
Chinese authorities declared that the seized cryptocurrencies will be processed and sent to the national treasury. This is a detail that everyone is wondering about, and it comes up for discussion at this point. If these cryptocurrencies are the product of a scam by the PlusToken pyramid scheme, why don’t they return the money to the investors? In China since 2017 it is not legal to operate with cryptocurrencies so investors already knew before entering the business that they were running a risk and if they were discovered they would lose their money.
What is going to happen with the crypto currencies confiscated by the Chinese government?
One possible scenario is that these cryptocurrencies will be burned and no one else will be able to mobilize these assets. The other possibility is that they are sent to some exchange and are changed to fiat money and can be used by the Chinese state.