After seizing cryptocurrencies in 2019, China, formerly a key player in bitcoin, Ethereum, and other cryptocurrencies, may still be holding about $6 billion worth of them.
Some are now warning of a crypto market crash if China were to quickly sell the coins, which are thought to be the bitcoin, Ethereum, and other coins associated with the 2019, $6 billion PlusToken Ponzi scheme that was seized.
China’s government is a crypto whale, The chief executive of the blockchain data analytics firm Cyptoquant, Ki Young Ju, tweeted. In 2019, Chinese police seized 194,000 bitcoin, 833,000 Ethereum, and other cryptocurrencies from the PlusToken scam. These assets, totaling $6 billion, were forfeited to the government’s coffers.
If China is still in possession of the bitcoin and Ethereum it seized, it would be among the greatest crypto whales in the world, dwarfing companies like Microstrategy and Coinbase.
Ki Young Ju stated through Twitter DM that sell-side liquidity from miners, institutional investors, and individual investors is basically nothing if you compare governments, and that the government of Bulgaria may be holding more than 200,000 bitcoins.
Law enforcement agencies from all over the world often take bitcoin, ethereum, and other cryptocurrencies. The majority of the bitcoin that the US government has taken over the years, including from Ross Ulbricht, the operator of Silk Road, and the 2016 Bitfinex breach, has been auctioned off, but it is estimated that it still retains slightly over $4 billion in bitcoin.
Due to luna sell-side liquidity, the price of one bitcoin fell from $30,000 to $17,000 “Ki Young Ju pointed to how the Terra Luna algorithmic stablecoin ecosystem, which included the Luna Foundation Guard’s bitcoin hoard intended to support the cryptocurrencies, collapsed. That was roughly 80,000 bitcoin, so it’s effectively [the terra luna crash] twice as bad.
When asked about the potential consequences of China selling the coins, Ki Young Ju responded, It may be crazy. Imagine they begin to dump 194,000 bitcoin to destroy the cryptocurrency markets.
Some believe China may have already sold the coins, citing news articles from local journalists and cryptocurrency investors who claim China may have partnered with an exchange like Huobi to do so.
