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.

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Attacker Exploits Defi Protocol to Make $360,000 in a Single Transaction

Francisco Memoria

Ab attacker has managed to exploit the decentralized finance (DeFi) protocol bZx to make over $360,000 worth of profit in a single transaction through what’s known as flash loan.

Using a decentralized trading platform dYdX, a hacker borrowed 10,000 ETH, currently worth around $2.5 million, and then sent half of it to decentralized finance lending platform Compound, and half to decentralized trading platform bZx.

Using the funds on Compound, it borrowed 112 wrapped bitcoin tokens (wBTC), ERC-20 tokens backed 1:1 by bitcoin. Using the half on bZx, the hacker entered a short position for 112 wBTC. He then sent the 112 wBTC it got from Compound to another trading platform, Uniswap, in a move that lowered the price of the tokens which made the short sale profitable.

The hacker then repaid his loan to dYdX and kept the profit from the short sale, 1,300 ether that were then worth $360,000. All of this was made in a single transaction that cost around $8 worth of transaction fees.

single transactionSource: Etherscan

The attack was pulled in a single transaction through what’s known as a flash loan. Essentially, the attacker borrowed 10,000 ETH without any collateral as he borrowed the funds in the same transition that paid them back. Through a smart contract, it was possible to pull the transaction.

Using the exploit, the hacker made over 1,000 ETH in profit and cost the bZx protocol over $620,000 in equity. bZx has made it clear users won’t suffer from the loss as it will compensate them. Those behind the project are set to release a detailed analysis at 5pm MST.

Data from DeFi Pulse shows that investors quickly started withdrawing from bZx right after the incident occurred, but started regaining confidence as soon as the project addressed the issue and clarified they wouldn’t be socializing the loss.

Featured image via Pixabay.