Pure Bit Exit Scam

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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.

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

About PureBit

“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.”

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Pure Bit Exit Scam

Date	Event	Description
November 1st, 2018 12:01:09 AM MDT	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $2,800,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Coming soon.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.