Chinese Ponzi nets ~$10m in Bitcoin to stop “cruel cosmic entropy”

Ain’t no rest for the scammy—even in a time of crisis, a new Bitcoin-related Ponzi scheme is making the rounds. The scheme claims it’s attracted 180,000 Bitcoin ($1.2 billion)—though it’s probably only corralled around a thousand or so (roughly $10 million), security researchers tell Decrypt.

Antimatter Kingdom, or AK for short, has been alive since April 1. It’s a cryptocurrency that it claims runs on the so-called Capital Cell Fission Blockchain (CXC), according to its website. 

Its website also claims that CXC will “compete with the cruel cosmic entropy law and make the development of commercial civilization lasting and orderly.” What’s more, the Ponzi’s scheme also promises exponential returns, which it calls “the ecological exploration of a trillion-dollar value.”

So what can you do to deliver the trillion-dollar value from the bad, mad cosmic entropy? Handily, CXC’s made it easy for you: send some Bitcoin to CXC, and the protocol promises to “mine” AK on your behalf, which it’ll then give you, along with monthly dividends in Bitcoin. 

According to the project, there are three tiers of mining: AK infinite mining, CXC annihilation mining, and soul mining. To illustrate its scheme, CXC chose—in true Ponzi style—a literal pyramid.

Cosmic powers aside, the AK token is, unfortunately, worthless. Though, like other Ponzis, it makes small payments to some holders to save face, the majority of Bitcoin is being sent to exchanges, security researchers told Decrypt.

Harry Denley, Director of Security at Ethereum wallet MyCrypto, also told Decrypt that the scheme’s private key generation appears to be fairly insecure. But their code is closed-source, so it’s impossible to know for sure, he said.

The damage

Primitive Venture partner Dovey Wan, an entrenched member of the Chinese crypto community, tweeted yesterday that the scheme is enjoying “decent popularity” in Asia and estimated that around 5,000 BTC has fallen into the hands of the scammers. 

Wan’s claim might be a little exaggerated, according to independent blockchain research team Ergo, which previously traced funds from the $1.4 billion Plus Token scam. But Wan’s claim may not be off by much, they told Decrypt

Ergo traced transactions from CXC’s block explorer and said that, while they “can't independently verify the addresses without installing [the scheme’s] mining malware,” Wan’s claim is “a good first jumping-off point.”

Using blockchain data published by the AK team, Ergo identified clusters of addresses that contained anywhere from 1,600 to 1,800 BTC—or roughly $12,000,000. That volume is “fairly high for this early on in a Ponzi,” Ergo noted.

Some of these transactions may be made by the scammers to falsify interest, but the smaller transactions are likely “token purchases or payouts to token holders,” Ergo told Decrypt. They also said that the scammers have sent hundreds of Bitcoin to Huobi, Binance, and OKEx for liquidation.

The new Plus Token?

$12,000,000 is no petty sum, but it’s nothing compared to the 200,000 Bitcoin ($1.4 billion) stolen in the Plus Token scam.

But Antimatter Kingdom possesses similarities with Plus Token. Like Plus Token, AK’s website is scrawled over with gibbering word salad and throws around useless terms and phrases that are further garbled by the linguistic leap from Mandarin to English. And, like Plus Token before it, the scheme also makes grand promises of outsized returns.

Another curious common link: Antimatter Kingdom claims that its token can be stored in a number of wallets, one of which is Huobi, a Chinese exchange that Chainalysis and other independent researchers proved was offering trading to OTCs that held some of the PlusToken funds.

It appears crypto investors can’t catch a break. dForce, a decentralized finance protocol built on Ethereum, lost $25 million in an exploit this weekend after hackers exploited a known vulnerability with an Ethereum token. The attack came right after the Chinese project raised $1.5 seed funding.