South Korean Crypto Exchange Pure Bit Exit Scams After Raising 13,000 ETH

South Korea cryptocurrency exchange Pure Bit has recently pulled an exit scam after raising a total of 13,000 ETH through an initial coin offering (ICO). At press time, the amount raised is worth $2.7 million.

The team behind Pure Bit reportedly remained anonymous as its ICO was based in South Korea, which banned the fundraising practice months ago. This gives projects the perfect excuse to remain anonymous, but makes it riskier for investors.

The team behind the scam seemingly shut down its website before moving the 13,000 ETH from its wallets, and kicked every member off of its Kakao group chat before posting “sorry” and “thanks” to its communication channels.

On Reddit, one user pointed out that things look bad for investors, who will likely have to try and follow the funds on the blockchain to try to get something back.

They have gotten rid of every evidence. Website hosted by fake name / out of Korea host / messenger / contacts were all fake too. Now their only hope is to keep on track with that ether and hope for the best.

The team behind Pure Bit has already deleted its social media accounts as well. It promised investors a Pure Coin, which would serve as the native token of its cryptocurrency exchange, and would pay holders regular dividends.

Those who used the coins while trading were reportedly going to be rewarded as well. To get more investors on board, Pure Bit was running an affiliate campaign that rewarded users extra tokens for bringing in new investors. The minimum investment amount was of 5 ETH.

The project’s ICO was set to end on November 30, but the team seemingly decided not to wait to pull the scam. As CryptoGlobe covered, exit scams have been regular this year, so much so that a report suggested they’ve taken over $100 million from investors.

Bitpoint Reveals Breakdown of Funds Stolen and Pledges Reimbursement After Hack

Neil Dennis

Japan's Bitpoint cryptocurrency exchange has published a breakdown of the assets lost in this month's security breach where hackers stole around Y3 billion ($28 million), and has pledged to reimburse customers.

A document published by parent company Remix Point on Tuesday showed that of the Y3.02 billion stolen, Y2.6 billion belonged to customers, while Y960 million were company-owned assets.

Here's the full breakdown:

  • Bitcoin BTC1,225 - total stolen worth Y1.53 billion at the time of attack: Y1.28 billion belonging to customers and Y250 million to the exchange
  • Bitcoin cash BCH1,985 - worth Y70 million at time of attack: Y40 million customer owned and Y30 million exchange owned
  • Ether ETH11,169 - worth Y330 million at time of attack: Y240 million customer owned and Y90 million of exhange's
  • Litecoin LTC5,108 - worth Y500 million, with about Y40 million in customer funds
  • XRP28,106,323 - worth Y1.03bn at the time of attack of which around a quarter were customer funds

Reimbursement

Remix Point added in its Tuesday statement that it would reimburse customer losses, compensating them in lost cryptocurrencies rather than their fiat equivalent.

The exchange revealed on Sunday it had already tracked $2.3 million worth of stolen tokens. Reported by Finance Magnates Bitpoint said it had recovered the funds and reabsorbed them.

Bitpoint said last week's security breach occurred due to unauthorized access to private keys of its hot wallets and now intends to move all holding into cold storage, where no breaches of security had been detected.

Co-operation With Regulators

Remix Point said in the document published on Tuesday that it was co-operating with self-regulatory body, the Japan Virtual Currency Exchange Association, to help establish better security measures across the industry.

It requested the association, along with its exchange rivals, monitor any suspicious activity in the coming days that might involve the deposit of funds potentially associated with the incident.