Cryptocurrency startup Pure Bit dupes investors of $2.7 million

The Korean start-up planned to launch its own digital currency

A major setback for the Korean cryptocurrency ecosystem

For all the baby steps the crypto industry takes forward with promising developments and ideas, often times it gains a backward traction courtesy of actions of some wrongdoers. A similar case came about on November 9, 2018, when a crypto-centric startup based out of South Korea, Pure Bit, pulled an exit scam duping its private investors of 13,000 ETH valued at close to $2.7 million.

Exit Scams Continue to Mar the Industry

Per a tweet by the local cryptocurrency news outlet BlockchainROK, a relatively new Korean exchange by the name of Pure Bit pulled off a crypto heist when it abruptly shut down all its operations overnight and mysteriously disappeared from all social platforms.

?? – 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. pic.twitter.com/GDkjiz1gAq — Korean Cryptocurrency & Blockchain News (@BlockchainROK) November 9, 2018

The ICO-funded startup was ‘planning’ to launch a cryptocurrency exchange by introducing its own native token by the name of PURE coin. The startup was successful in raising close to 13,000 ETH via crowdfunding.

However, things got suspicious just before the conclusion of the project’s first pre-sale, as the investors took to social media and expressed their concerns about members being removed from Pure Bit’s Kakao (messaging platform) channels.

Investor’s concerns got fueled when they discovered that Pure Bit’s official website has been abruptly taken down. Anyone who visited the website was greeted with “this site is inaccessible” message – definitely not something one would want to read after investing heavily into something.

Although one can’t discount the financial distress investors must be going through, instances like these become all the more important and unfortunate as they dent the image of the nascent industry at a time when it needs utmost confidence from the masses.

Potential Pushback for ICO Regulation in South Korea

As previously reported by Blockchain Reporter on October 12, 2018, South Korea’s financial watchdog the Financial Services Commission (FSC) maintained its distance from Initial Coin Offerings stating that they are “still too risky.”

On the contrary, the peninsular country has not held back in promoting the distributed ledger technology, as the Korean government recently pledged to invest close to $207 million in 10,000 blockchain-based startups by 2022.

That being said, exit scams like these will no doubt have an adverse impact on the pro-ICO arguments laid down by the Korean lawmakers who have been incessantly pushing for the removal of the ban on local Initial Coin Offerings.