Pure Bit, a cryptocurrency exchange in South Korea, has allegedly pulled an exit scam, disappearing with more than $30 million worth of user funds.
On Nov. 9, as BlockchainROK, a trusted news source in South Korea reported, the management team of Pure Bit started to delete social media handles of the exchange and kicking users out of KakaoTalk chat groups.
The official KakaoTalk account of Pure Bit was renamed to a formal phrase in Korean, which translates to “I’m sorry.”
Screenshot of Pure Bit’s KakaoTalk group shared by HanKyung
Initially, around 13,000 Ethereum (ETH) was moved from the address of Pure Bit. Over the last 24 hours, nearly $10 million worth of ETH was moved from Pure Bit’s address.
$30 Million Stolen
According to HanKyung, a mainstream business-focused mainstream media outlet in South Korea, Pure Bit executed an exit scam with more than $30 million in user funds.
Earlier this year, Pure Bit raised $30 million in an initial coin offering (ICO) to create a cryptocurrency exchange. Within months since its token sale, the team behind the token sale disappeared with all of the funds raised during the ICO.
Pure Bit tried to send a portion of the stolen user funds to Upbit, the second largest cryptocurrency exchange in the local market. But, after discovering that the funds from the scam were sent to the exchange, Upbit disabled the account operated by Pure Bit and froze the funds.
Speaking to HanKyung, an expert in the local cryptocurrency sector said that with proper ICO regulations and policies in place, the exit scam could have been prevented.
“The case could have been prevented if the government had implemented proper guidelines and regulatory frameworks related to ICOs.