Whale Associated with Chinese Ponzi Scheme Becomes The Fifth Biggest MATIC Holder

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.

The Chinese MLM Ponzi scheme, popularly known as ‘Avatar’ has turned out to be the fifth biggest holder of MATIC after it surpassed the current holdings owned by Binance‘s hot wallet 2.

Investing In MATIC As A Potential Investment   

The Chinese digital asset project has gained widespread attention within the crypto community because of its enormous consumption of Polygon gas fees as a result of its recent transactions. As per on-chain data shared by PeckShield, the address has consumed more than 100,000 MATIC in gas fees worth $122,000 over the last week.

On-chain analysis by PeckShield showed that the Ponzi-related wallet address completed more than 117,000 transactions on February 12, an activity that triggered Polygon gas fees to spike by more than 700 gwei.

While there is little information about the Chinese Ponzi project, the scheme is known 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 the project, given the suspicious high monthly returns (with minimal risks) it offers to participants.

The Ponzi project 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 the network. In such a Ponzi project, funds accumulated from newer investors are typically used to pay early investors.

The project’s recent activity shows a rising demand for MATIC among investors (increasingly investing more in cryptocurrency) and a growing appetite for crypto as an investment. It appears that individuals running the Ponzi scheme use derivatives and leveraged products and other complex trading strategies to trade MATIC as part of their programs to make profits for their users.

MATIC Price Action

Of late, Polygon (MATIC) has witnessed an impressive turnaround, surging 55.29% in price over the last 30 days. Such an uptick brought the price of the digital asset to $1.20 as of February 6, 2023. Due to such an impressive rise in its value, crypto investors have been turning to Polygon as a digital asset they need to purchase.

Although Polygon has had a solid surge in the last 30 days, it had experienced a difficult time over the previous 12 months. It is still down 42.64% from the highest record made last year.

The recent drop in prices of most cryptocurrencies seen last week is reflected in the current price of Polygon.  At the time of writing this paper, MATIC is trading its value at $1.17, down 9.17% in the last 24 hours, with a trading volume of $737 million. With a market cap of $10,2 billion, Polygon is currently number #10 among cryptocurrencies listed on Coinmarketcap.