South Korean Crypto Exchange Pure Bit Disappears with over 13,178 ETH
A South Korean ICO swindled roughly 13,500 ETH ($ 2.8 million) from its investors who participated in private sales and then completely vanished from the web. Pure Bit, which has shut down its website, seemingly carried out a pretty standard exit scam for its Pure Coin token offering.
The cryptocurrency was posed as a native token of Pure Bit, a crypto exchange which was scheduled to begin its operation by the end of the month.
The team behind Pure Bit guaranteed to give out investors a share of the trading revenue of the exchange as well as discounted trading fees. Furthermore, its unidentified team had promised to burn 90% of the token supply over a three year period.
A block explorer for the ICO Ethereum wallet shows several inbound transactions of investors, the first one dated 4 November 2018. However, initially 500 ether was moved on 9 November 2018 and the left over 13, 178 were transferred 20 minutes later.
However, not all the proof of the actual presence of this firm was instantaneously erased. A Reddit thread presented screen shots of the last moments of the exchange with Korean translations.
According to the Reddit user u / Tbid, who obviously observed the story develop, Pure Bit was a crypto exchange that reported an exchange token launched after an ICO process. However, soon after the ICO ended, all the funds were moved to a distinct wallet.
As shown in the attached screenshots, every participant in their Kakao chat thread was quickly kicked out by the community administrator before posting a last message of “Thank you.” This data was assisted by a Twitter thread, which further stated that the admin note on their now nonfunctional Kakao profile was an abrupt but desperately official confession.
Between wallet exchanges, dubious website actions and unambiguous statements of regret from the administrator, this exit rip-off is went strictly by-the-book. Fraudulent conduct such as this is a repeating warning to ICO issual, which is a major reason why South Korea has totally banned ICOs.
?? – New Korean exchange Pure Bit just pulled an exit scam claiming 13,000ETH from its investors as we speak. Kakao channels are emptying and the site has been pulled.
This is why we can’t have nice things. Karma comes back hard when you screw this many people over. pic.twitter.com/GDkjiz1gAq
— Korean Cryptocurrency & Blockchain News (@BlockchainROK) November 9, 2018
By committing a white collar crime involving large amount, the anonymous Pure Bit administrators will probably face certain severe legal issues. As one observer said on the Reddit thread, the South Korea enforcement authorities will certainly be “hot on its tails.”
Indeed without the danger of exit scams, South Korean law enforcement agencies are well-trained to take on cybersecurity dangers, as the world’s notorious crypto hacking union, backed by the North Korean government, has on a number of times tried to plunder South Korean cryptocurrency exchanges.