Pure Bit Disappears with $2.8 Million in ICO Exit Scam

Summary

Pure Bit, a South Korean cryptocurrency exchange, orchestrated an exit scam, swindling roughly 13,678 ETH ($2.8 million) from its private investors by promoting the potential for profits through its exchange token, Pure Coin. The platform promised token holders a share of the exchange’s trading revenue and discounted trading fees, enticing investors with the prospect of significant returns. Additionally, the team behind Pure Bit claimed that 90% of the token supply would be burned over three years, suggesting an induced scarcity that could potentially increase the token’s value. After concluding its ICO, Pure Bit abruptly shut down operations and withdrew substantial amounts of Ethereum from the ICO wallet on November 9, 2018.

Attackers

The anonymous team behind Pure Bit.

ICO wallet:

• 0x7df1bd58e8fd49803e43987787adfecb4a0a086c

The following addresses are associated with the Pure Bit team:

• 0x69627dad496db160a81bed9e27ce2da67c3242bd
• 0xfeaa8ebd3f3ec6301aa12237e2be3a9e25f36f3c
• 0x1fd41f2da3fcd5e61c4a6b70d387e480b6c38dba
• 0xd83605cf3aed2a56949c27f693c08aeda0e4d145
• 0xee8fa6f4c6f6325beecda695fe9357946ce6f538
• 0xfc40c2993a0225b6397f0be19f41304fde4ee435
• 0x0844ad5bd729f536f1aee085940eea6fb764e000
• 0x63cba70964facb5f60b2028549411f5bfe3f199e

Losses

Investors lost around 13,678 ETH, valued at approximately $2.8 million, to the scam.

Timeline

• November 5, 2018, 03:25 AM UTC: Investors started transferring money to the Pure Bit ICO wallet.
• November 9, 2018, 08:16 AM UTC: Pure Bit team withdrew 500 ETH.
• November 9, 2018, 08:36 AM UTC: Pure Bit team withdrew 13,178 ETH.

Early Indicators

• Anonymous team: The lack of identifiable information on the team members was a significant cautionary sign.
• ICO Investment Method: The ICO’s simplistic approach of directly depositing Ethereum into a wallet without reliable, transparent mechanisms for tracking and accountability signaled a lack of security and reliability.
• Promises of High Returns: Pure Bit’s pledge to share exchange trading revenue and offer discounted fees for trading raised suspicions.