• A wallet address associated with a Chinese MLM Ponzi project has recently accumulated over 22.37 million MATIC tokens.
• The wallet has consumed more than $122,000 worth of Polygon gas fees in the past week.
• The Ponzi scheme is known to use derivatives and leveraged products, among other complex trading strategies, to trade MATIC as part of its program to make profits for its users.
Chinese MLM Scheme Accumulates 22.37 Million MATIC
According to the on-chain blockchain security and data analytics company PeckShield, a wallet address associated with a Chinese multilevel marketing (MLM) Ponzi project has amassed more than 22.37 million MATIC in the past few days. This makes it the fifth largest holder of MATIC after overtaking Binance’s hot wallet 2 holdings.
The Chinese digital asset project, popularly known as ‚Avatar‘, has gained widespread attention within the crypto community because of its enormous consumption of Polygon gas fees as a result of its recent transactions. On-chain analysis by PeckShield showed that the Ponzi-related wallet address completed more than 117,000 transactions on February 12th, an activity that triggered Polygon gas fees to spike by more than 700 gwei. Little is known about the Chinese Ponzi project but it is thought to operate on Chinese social media and offers a referral staking protocol with extremely high rewards (referral stake of 1% APR daily).
Some crypto community members have warned about this project given the suspiciously high monthly returns (with minimal risks) it offers to participants. The Ponzi scheme uses a controversial hierarchical system called ‚multilevel marketing‘ that requires users to generate revenues by marketing its services and products and recruiting others to join their network. Funds from newer investors are typically used to pay earlier investors in such schemes which may present some risk for those considering investing in them or using their services/products.
The activity from this particular address shows there is rising demand for MATIC among investors (increasingly investing more in cryptocurrency) and an increased appetite for crypto as an investment option overall. It appears individuals running the Ponzi scheme use derivatives and leveraged products alongside other complex trading strategies to trade MATIC as part of their programs in order to make profits for their users.
The presence of a large number of funds being invested into this particular Chinese MLM Ponzi confirms there is growing interest in cryptocurrencies investments amongst all types of investors – both new and experienced alike – looking for lucrative opportunities within this space. However, due diligence should be taken when considering such investments given their potential risks involved with these types of projects