China Holds $6 Billion Worth Of Crypto, Could 'Kill' Crypto Markets If It Wishes: Analyst

Zinger Key Points
  • The Chinese government holds atleast 194,000 Bitcoin, 833,000 Ethereum from the PlusToken scam of 2019.
  • China could 'kill' the government if it were to offload the seized cryptos it holds.

The Chinese government is a “crypto whale” having forfeited digital currencies to the tune of $6 billion to the national treasury in 2019, according to the founder and chief executive officer of blockchain data analytics firm Cyptoquant, Ki Young Ju.

Young Ju stated that Chinese authorities seized 194,000 Bitcoin BTC/USD, 833,000 Ethereum ETH/USD, and other cryptocurrencies from the PlusToken scam in 2019.

“They forfeited these $6 billion-worth assets to the national treasury,” he stated.

Listed Companies’ Bitcoin Holdings Pale In Comparison

In comparison, MicroStrategy MSTR, Galaxy Digital Holdings BRPHF, Tesla TSLA, Coinbase Inc COIN, and Block, Inc SQ hold 130,000, 40,000, 10,725, 9,000 and 8,027 Bitcoin, respectively.

In 2018, PlusToken was set up as a blockchain project in the eastern province of Jiangsu, China by Chen Bo and his accomplices, promising high returns on investments, thereby luring millions of people.

Investors were also required to pay membership fees in cryptocurrencies.

Eventually, along with 82 core members hiding in Cambodia, Vanuatu, Vietnam, and Malaysia, all 27 of PlusToken's accused masterminds were apprehended in 2020.

Authorities also seized billions in cryptocurrency that had been obtained through the scam.

"Sell-side liquidity from miners, institutional investors, and retail investors is almost nothing if you compare governments," Young Ju told Fortune via a Twitter DM.

In a separate Twitter post, Young Ju said the government of Bulgaria holds over 200,000 Bitcoin.

Also read: Private Communication Reveals Do Kwon Allegedly Instructs Co-Worker To Manipulate Price Of Luna Token

Young Ju pointed to the collapse of the Terra Luna algorithmic stablecoin ecosystem LUNC/USD, which included the Luna Foundation Guard's stockpile of Bitcoin intended to support the cryptocurrencies, and claimed that "Bitcoin dropped from $30,000 to $17,000 because of Luna sell-side liquidity. That was around 80,000 Bitcoin, so it's basically twice [the Terra Luna collapse]."

Chinese Government Selling Its Crypto Holdings Could Be Crazy

When asked what could be the effect of the Chinese government selling its forfeited Bitcoin, Young Ju said, "It could be crazy. Imagine they start dumping 194,000 Bitcoin to kill crypto markets."

Price Action: Major cryptocurrencies are trading flat on Saturday, according to data from Benzinga Pro.

Also read: Is The Dogecoin Slump Just A 'Blip' Before A Rally? Here's What Experts Say

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