PureBit Exchange ICO Update: Remorseful Refunders or Ultimate Scam Artists?
Since time immemorial people have been looking to make money via bold and enterprising ventures. And from exactly that time on, there have been people looking to scam those people and run away with that ill-gotten wealth. Earlier this month it appears PureBit joined the long list of the latter.
Live from the #PureBit #ExitScam case: it seems the scammers are trying to mislead users by promising them a refund of 50% from the scammed funds in #exchange for their private keys. Please be vigilant about who you share your private keys with! Read more: https://t.co/eFPmHKqlHo pic.twitter.com/IFKoipmMRy
— Uppsala Security (@UPPSentinel) November 13, 2018
However, in a slight twist in the tale, the young Korean exchange began to return the money of their backers. For some context, PureBit, the exchange in question, had a recent ICO. They then supposedly went through, what many described as an exit scam. This occurs when the cryptocurrency promoters vanish with investors’ money during or after an ICO. Owing to the decentralized, anonymous and regulation-free nature of the virtual currency ecosystem, it can be a hard ask to trace scammers.
This Korean exchange, which suspiciously lasted for just a few days, whisked away nearly 13,000 ETH. Almost immediately, those funds had been marked as fraudulently taken. Then the wallets related to PureBit began showing some interesting activity. It seems those assets are being deployed again, getting distributed to multiple addresses. It appears that the duped investors might be receiving, at least in part, their funds back.
On a cautionary note, there are things to consider. As the online watchdog SentinelProtocol puts it ” Live from the #PureBit #ExitScam case: it seems the scammers are trying to mislead users by promising them a refund of 50% from the scammed funds in #exchange for their private keys. Please be vigilant about who you share your private keys with!” Anyone would be within their right s to be skeptic about proving private keys. Many fear this might be the ultimate trick; a scam within a scam. Baiting those who have already been scammed with the hope of recovering at least part of what they have lost.
In some online reports, it is noted that a few of the backers have been returned nearly half of their investment, along with a note from the failed exchange. Korean Cryptocurrency and Blockchain News has commented: “Oddly enough, the perpetrator has already partially refunded several victims.”They say that PureBit has apologised and promised to return 50% of funds stolen, back to the victims; if they are able to prove their addresses on EtherScan.
If found to be true, this would rank as another successful fraud returns of late. It comes close on the heels of another recovery, the CoinDash hack. In that instance, about 20,000 ETH was with a hacker for over a month, before being safely returned to the original owner.
This entire saga has mostly been limited to Korean backers. Fortunately, or perhaps, unfortunately, depending on whether on not one had invested, PureBit was to be a small-scale exchange with its own native token, in a similar vein of Binance. When the ICO was able to pull in less than $3 million, things were looking grim. To make matters worse, the recent downturn of Ethereum (ETH) prices meant the valuation was closer to about $2 million. This is still small-scale compared to more notorious scams, a la Centra, where over $30 million in valuation was lost.
Though in terms of scale it might be an exit scam of relatively small proportions, yet the general apathy of the market is not being helped by such news. Even as the industry needs to be alert to these sort of activities, the investors need to play their part by doing due diligence before backing any such projects.