The Chinese government has just recently hunted down 72 individuals connected to the Cloud Token (CTO) scam which made away with about $500 million.
According to regional press, the CTO scam artists are likely connected to the Plustoken swindlers, a similar Ponzi fraud scheme.
After the Cloud Token arrests in China, police in Inner Mongolia has warned the public about another MLM crypto project.
In 2018, the cryptocurrency community was introduced to a project called Cloud Token. Similar to the Ponzi scheme Plustoken, CTO called itself the first online wallet that could integrate all the popular crypto assets out there today. The creators claimed CTO was a ‘4.0 blockchain project’ and the wallet held USDT, TUSD, BCH, CTO, BTC, LTC, ETH, and DOGE and promise 6-12% interest every month just like Plustoken.
Though founded by the project’s lead developer Ronald Aai and project manager Daniel Csokas from Singapore, subsequent articles describing the Cloud Token project has pointed to a possible connection to Plustoken creators.
A report in June highlighted the Cloud Token project’s decision to relocate from its initial base of operation in Singapore to Malaysia and the Republic of Mauritius.
In a public statement in June, the publication behindmlm.com reported;
“In addition to committing securities fraud in the US, Cloud Token is also not registered to offer securities in Singapore or Malaysia,”
The following September, Mauritius’ Financial Services Commission (FSC) issued a statement, warning the public to beware of CTO:
The public is being solicited by a certain group of people on social media under the name of ‘Cloud Token Mauritius’ and ‘Cloud Token Indian Ocean and Africa’ to invest in digital assets and cryptocurrencies through the ‘Cloud Token’ mobile application. It has also come to the attention of the FSC that events are being hosted in publicly accessible areas in Mauritius to promote this application. The FSC urges investors and the public to exercise caution in any dealings with Cloud Token Mauritius and Cloud Token Indian Ocean and Africa.
In December, following the FSC statement, news.bitcoin.com reported the arrest of 72 CTO associates. Police from Taiyuan, Shanxi province caught the alleged scammers at a train station and investigators disclosed the project defrauded Chinese investors out of 30 million yuan ($4 million) while another editorial published by the China-based publication 8btc claims that the CTO project actually made away with $500 million.
A statement by an anonymous CTO victim to 8btc reveals that $20,000 was deposited into the wallet.
“The crypto scam stole over $500 million from unsuspecting holders, claiming it’s a decentralized wallet that would reward its users for holding coins,”
He stressed that payments were supposed to come in the form of the company’s utility token and the reward would be 6% to 10% of the invested coin amount. However, none of these promise came to fruition as the person promising the rewards vanished, leaving over 800,000 members in the dark.
Despite government’s attempt to crack down on the fraud schemes, the fight is far from over. There are CTO websites still operational, some promising the price per CTO to be $0.50 and giving referral code.
According to 8btc columnist Lylian Teng, China’s police force is also attempting to squash another crypto Ponzi scheme called Wotoken (WOR). Behindmlm.com has informed the public that Wotoken’s website “provides no information about who owns or runs the business.” The Wotoken Ponzi scheme promises a daily ROI for a deposit of crypto coins. The multi-level marketing crypto also involves shady referral commissions that allegedly distribute WOR returns.
From investigating and reporting on a large number of scams like Onecoin, Cloud Token, Plustoken, and Wotoken as well, a behindmlm.com report asserts,
“By now you should be familiar with the MLM cryptocurrency exit-scam model,” “Whenever whoever is running Wotoken decides they’ve stolen enough money or investor recruitment collapses, they’ll announce WOR’s public listing.”
A review on Wotoken on the MLM website admits that every known and uncovered MLM cryptocurrency scheme has followed a similar pattern of operation and so, asserts that Wotoken will be no different either.