Reports arose that a South Korea based crypto startup pulled an exit scam private sale investors. Thousands of Ethereum were stolen in the process.

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BlockchainROK, a crypto and Blockchain News outlet in Korea announced the sad event on Twitter. They tweeted,

@BlockchainROK

New Korean exchange Pure Bit just pulled an exit scam claiming 13,000ETH from its investors as we speak. Kakao channels are emptying and the site has been pulled.

This is why we can’t have nice things. Karma comes back hard when you screw this many people over.

Reports on the scam

BlockchainROK reported that Pure Bit, the ICO founded startup planned to launch a crypto asset exchange. They received crowdfunding transactions, which amounted to 13,000 Ether (ETH) and quickly routed the $2.7 million in cryptocurrency to personal wallets.

When the event occurred on November 9, a few days to the first presale of the project, investors went to social media and claimed that the project’s messaging platform on Kakao were wiped off its members. Also, the website was taken down and visitors to the site are greeted with “this site is inaccessible” on the front page.

The news comes ahead of the apparent strategy by the startup to launch its platform before the month’s end, making the exit scam more confusing and disappointing for the industry as well as investors.

How did they get investors to trust them?

Pure Bit’s web page revealed that the startup was planning to start an Ethereum based mining coin, which would allow users to receive exchange profits through a dividend system.

The page’s archive also revealed that holders of the coin would accrue more tokens as time passes. Users can also save up to thirty percent on trading fees. The shadowed firm also added that it would burn up to ninety percent of the tokens within a three-year mining period. These claims were all made to entice native investors.

Following the exit scam, the founder of Pure Bit’s left a message on the Kakao account which translates to “I’m sorry.” Even though the founder may be sorry, about 13,000 Ethereum which was stolen has not been recovered. This may prompt investors who are in financial shock to speak with local authorities on this matter.

Some fear that it may not be possible for the authorities to track down the ICO scammers. The disappearance of Pure Bit’s comes amidst rumors that the country’s regulators may be planning to release a negative stance against ICOs in a few weeks.

Ethereum price analysis

Currently, Ethereum is traded at $210.96. It continues a downward correction and as long as its price remains above the support level of $200.00, it could correct higher.

We can expect more development of the downward correction in the short term. Considering the mixed news background, a deeper dive into the support level is expected. If there is a breakdown of the $206.00 level, there may be a further drop to $200.00 – $199.20.

If there is a cancellation of the reduction option, there will be a growth from the present levels for a break through the present resistance zone and move to $223.00.