Exit Scammers Start Refunding Victims' ETH After Being 'Blinded by Money'

  • After raising 13,000 ETH from investors, the team behind an ICO took then funds and ran away.
  • A few days later, they've started refunding investors after what seems to have been a change of heart.

In what appears to be a strange twist, the exit scammers behind the “Pure Bit” cryptocurrency exchange have recently started refunding their victims after claiming they’ve made a terrible mistake while “blinded by money.”

As CryptoGlobe recently covered, the scammers raised funds this month through an initial coin offering (ICO) that was set to last until November 30. Before waiting for it to end, the group shut down its website and kicked investors out of their Kakao group, before emptying their wallets and running away with 13,000 ETH.

Pure Bit had promised investors the raised funds would be used to launch a cryptocurrency exchange and a token called “Pure Coin.” The coin would both be used to reward holders with regular dividends, and to reward those who traded it. To get more investors on board, Pure Bit reportedly ran affiliate campaigns. It required a minimum investment of 5 ETH.

The project’s team remained anonymous during the ICO, as it was based in South Korea – a country in which the fundraising practice has been banned. This made it riskier for investors, but it seems widespread media coverage brought the authorities’ attention and saw the scammers start returning 50% of the funds stolen.

https://twitter.com/BlockchainROK/status/1062405649026314240

In the group’s statement, they admit what they’ve done and recognized they “negatively affected investors in the project” both financially and psychologically. Per their words, they’ve made an “unforgivable mistake that cannot be turned around, blinded by money.”

The statement ends with an admission of guilt, and an apology to the ICO’s investors who were affected by the scheme. Blockchain data reveals the team behind Pure Bit has indeed been refunding some users, as addresses that sent them large amounts of ETH little over a week ago are currently receiving their money back.

Pure Bit is reimbursing users who contributed to its ICO

While some believe the scammers did get a change of heart, others have pointed out the attention brought to the case could see the South Korean authorities launch an investigation. As CryptoGlobe covered, exit scams have been somewhat regular this year, as they’ve already taken over $100 million from investors, according to a report.

'Big Spender' Bitcoin Wallet Exploit Is an 'Issue With BTC Itself', Says BCH Supporter

Michael LaVere
  • Crypto security firm ZenGo has identified a double-spend exploit dubbed "BigSpender" which affected popular bitcoin wallets.
  • Exploit allows an attacker to cancel a bitcoin transaction without the receiving user knowing. 

A crypto security firm has identified a double-spend exploit targeting popular bitcoin wallet providers. 

According to a report by ZenGo, the security firm has discovered a double and multiple spend wallet exploit for bitcoin dubbed “BigSpender.” The report claims the exploit allows an attacker to cancel a bitcoin transaction but still have it appear in a victim’s vulnerable wallet. 

The report reads, 

The core issue at the heart of the BigSpender vulnerability is that vulnerable wallets are not prepared for the option that a transaction might be canceled and implicitly assume it will get confirmed eventually.

As CryptoGlobe reported, ZenGo found that a user’s balance would be increased following an unconfirmed incoming transaction, without a subsequent decrease in the event the transaction being double-spent. The firm outlined how an attacker could use the exploit to cancel transactions of sent bitcoin while still receiving goods and services in return. 

The security firm tested nine popular cryptocurrency wallets and found BRD, Ledger Live and Edge to be vulnerable to the exploit. All three companies were notified by ZenGo of the threat and subsequently updated their products. However, the firm noted that “millions” of crypto users may have been exposed to the attack prior to the update. 

Bitcoin Cash supporter Hayden Otto told Cointelegraph the exploit is particularly concerning for bitcoin-accepting merchants. 

He said, 

The technique is facilitated by RBF (replace by fee), a so-called ‘feature’ added at the protocol level by the Bitcoin Core developers.The issue exists if you use BTC. Wallet software can only make some trade off, which results in a worse BTC user experience, in order to try to protect BTC users.

Otto claimed the exploit was derived from “an issue with BTC itself” and had little to do with wallet software. 

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