Ether (ETH) price faced fresh selling pressure on Dec. 19 as a giant transaction associated with the PlusToken ponzi scheme worried traders.
Giant transaction turns traders bearish on ETH
PlusToken, which hit a high of near $350 before crashing, has earned the infamous title of being one of the world’s biggest ponzi schemes. While still operational, its Chinese operators received an estimated $3 billion in Bitcoin (BTC) and ETH from unwitting investors purchasing PlusToken coins.
Despite several arrests, subsequent activity has shown one or more individuals still have access to the scheme’s wallets.
Noting the ETH move, trader and analyst Alex Krueger warned the consequences for the Ether price could be severe.
“Heads up,” he told Twitter followers.
As Cointelegraph previously noted, suspicions had already surfaced about PlusToken’s impact on Bitcoin. In a report last month, research firm Chainalysis suggested scammers may be using over-the-counter (OTC) off-ramps to sell BTC en masse, driving down the price.
Specifically, they eyed exchange Huobi’s OTC offering as a potential venue for the illicit transactions.
“Unfortunately, because it’s not possible to distinguish between trades made by OTC brokers in possession of PlusToken funds and all other trades made on Huobi, we can’t say for sure that PlusToken cashouts caused Bitcoin’s price to drop,” the report stated.
“However, we can say that those cashouts cause increased volatility in Bitcoin’s price, and that they correlate significantly with Bitcoin price drops.”
Cointelegraph has approached Huobi for comment. A representative said the exchange was examining the situation but had not responded as of press time.
Wertheimer: Ethereum has “reached the absurd”
While both BTC/USD and ETH/USD have fallen significantly in recent weeks, Ether faces added difficulties as slow progress and controversial decisions by Ethereum developers take their toll on sentiment.
This week, critics came out against a decision to implement a second hard fork on Ethereum in under a month, which they said would disillusion nodes, which could easily be jettisoned from the network.
“When your ‘decentralized’ network moves to a non-emergency schedule of one hard fork every 3 weeks, you’ve reached the absurd,” pro-Bitcoin commentator Udi Wertheimer summarized on Monday.
“You jumped the shark. There’s really no excuse to this and people should be talking about it.”