$2 800 000 USD

NOVEMBER 2018

SOUTH KOREA

PUREBIT

DESCRIPTION OF EVENTS

“Toward the end of 2018, pessimism and the bear market weighed down on all participants. PureBit, an ICO-funded startup, was promising to launch an innovative cryptocurrency exchange.” “Pure Bit, has completely shut down after raising $2.8 million in Ethereum from investors.” “According to a Reddit thread, the team was anonymous and that the process of building and pumping exchange tokens is a “popular trend in Korea.”” “They have gotten rid of every evidence,” wrote one reader. “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.” “It should be noted that South Korea has banned ICOs, giving scammers the perfect cover for absolute anonymity.” “PureBit, a recent ICO that went through an exit scam, has begun returning funds as a sign of remorse. The Korean exchange, which only existed for days, hauled away 13,000 ETH. The funds were marked as fraudulently taken, and the wallet watched.” “PureBit, despite originating in South Korea, raised its funds abroad, to circumvent the ban on domestic fundraising. The promise of an exchange-based token, with the potential for passive earnings based on trading fees, enticed buyers to pour funds into PureBit.”

While largely an ICO scam, this is included here because the exchange technically did exist for a few days, and it’s possible that some customers traded in that time period. The moral is very clear - always know who’s behind the exchange. This highlights the importance for regulations that work. If the process for registering and running an exchange is straightforward, consumers will expect compliance from all exchanges.

Sources And Further Reading

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