EOS Ecosystem allegedly defrauded users of approximately £40.3 million

An alleged EOS Ponzi scheme has scammed users out of more than £40.3 million. A report unveiled this news on April 20, noting that China-based EOS Ecosystem, a renowned EOS wallet shut down and disappeared with its users’ funds.

Reportedly, the wallet’s operator locked investors out, barring them from accessing their accounts via the EOS Ecosystem app. The operator then proceeded to move a large sum of the funds from the service’s account to a different account. The account is dubbed huobidevice3. However, the account is not affiliated with the Huobi exchange. Purportedly, this account has £38.7 million worth of EOS tokens at the moment.

EOS Ecosystem was reportedly a widely-known scam

Prior to shutting down, EOS Ecosystem functioned as an interest-paying wallet. Users entrusted their EOS tokens to the wallet and earned daily profits in return. EOS Ecosystem succeeded partly because it attracted a lot of people and paid out the daily returns for a few months. As such, the people that earned the interests evangelized the project and attracted more users. However, several scandals have rocked this project. Allegedly, it was a widely known crypto Ponzi scheme that has remained afloat over a long time.

EOS Ecosystem was reportedly sued in a local court in China. The project also claimed to be connected to other block producers and EOS organizations. However, the organizations named denied any affiliations and claimed that is it a fraudulent project on multiple occasions.

On top of this, the wallet’s daily returns were also suspicious.

According to a report,

The stolen funds are hard to cash out

While EOS Ecosystem’s operators managed to steal the funds successfully, they will reportedly have a hard time cashing out. This is because EOS is easy to track. As such, the funds could just sit in the huobidevice3 account for a long time as the alleged scammers wait for this issue to cool down.

Do you think the alleged EOS Ecosystem Ponzi scheme will have an impact on the price performance of EOS? Share your thoughts in the comment section below.