The crypto industry is no stranger to cases of fraud, hackings and related scams that have seen millions worth of crypto stolen or ‘lost.’
And that trend seems set to continue, this time with news that a South Korea-based cryptocurrency exchange has pulled an exit scam on its investors.
Pure Bit pulls massive exit scam
According to reports, Pure Bit has disappeared into thin air, making off with over 13,000 ETH (about $2.8 million) raised from its investors.
Korean news outlet alerted its readers about the scam on its Twitter account, later adding that Pure Bit’s CEO had replaced his official Kakao account name with a sarcastic “I’m Sorry” note. Kakao Talk is a popular South Korean social media platform.
Also disappearing from the public view is the exchange’s Website and the Facebook pages that have suddenly become “unavailable.”
Various commentators on Reddit and other social media platforms have noted that the company’s executives have removed most of the contact information that links to the Pure Bit.
Erasing its tracks
Although there seems to be a deliberate attempt to erase any trace of the company, a search on Archive.org shows the company’s website before being taken offline.
Pure Bit ICO – Pure Coin (PURE)
Pure Bit wanted to launch its own ICO, using much the same model as that employed by other exchanges to roll out crypto tokens. The platform’s coin would be called Pure coin (PURE) and would have been used on the Pure Bit exchange.
The appealing communication could have enticed some of the investors in the private pre-sale, part of which said that investors could “get a portion of the exchange’s return just by having a PURE COIN.”
The company’s pre-sale was set to complete in days as it looked to launch its coin on the Ethereum blockchain.
Pure Bit’s attractiveness appears to have been in its “mining coin” concept a deal that would have seen token holders benefit from dividend-like earnings on the exchange.
The exchange also promised to give a 30% discount to traders whenever they use PURE to pay for the transaction fee, similarly to Binance’s BNB. Another promise was the burning of up to 90 percent of the PURE token over three years through its innovative “mining” model.
A translation of the site’s page loosely says that:
“… PURE COIN is a 3rd generation mining coin that includes dividend + mining + incineration.”
There have been a number of high profile exit scams in the crypto industry, with the purported lack of clear regulatory oversight contributing to the scenario.
Some of the largest exit scams include:
- Shenzen Puyin Blockchain – $60 million
- Cryptokami – $12 million
- NVO – $8 million
- LoopX – $4.5 million
As the story develops, the main concern will be the impact this latest exit scam has on the ICO situation in South Korea. The country’s authorities are set to give directions on the push to have initial coin offerings legalized.