Unfortunately, another ICO scam has finally burst into flames and exited with a lot of investor money. Pure Bit is a South Korean crypto exchange and it ran an ICO in secret – due to the fact ICOs are illegal in South Korea.
Pure Bit operated anonymously, with its website registered to a fake name and social media accounts accessed by fake profiles. It’s being dubbed as the perfect ICO scam, as crypto investing is big in South Korea, meaning investors are more likely to jump in without hesitating and doing their research.
13,000 ETH Missing
In a classic move, Pure Bit transferred the funds it raised in the ICO to other wallets, shut down its website, and social media accounts – there is virtually no trace of the crypto exchange. Due to the fact ICOs are illegal in South Korea, there is a good chance the regulatory authorities won’t be willing to help, as investors were breaking the law.
The group behind the scam managed to bag 13,000 ETH, which is worth around $1.7 million, making it one of the largest ICO scams this year. All investors can do now is keep watching the ETH, as it moves from wallet to wallet in the hope the thieves slip up.
Bahamas Cracking Down on ICO Scams
The Bahamas has had enough of ICO scams on its shores and it’s finally adapting its crypto regulation to stamp out scams. In a move similar to France, the Bahamas will be implementing a set of rules an ICO will have to adhere to, such as creating a set of documents that only a real ICO would have. This would essentially create the ICO version of UCITS and it would make real ICOs easier to distinguish from the fake ICOs.
Colorado Taking Down Scammers
The state of Colorado has also been hard at work removing scam ICOs from the landscape. Just days after winning the governorship, Jared Polis and his team have issued cease and desist orders to four ICO scams in the state. This latest crackdown is simply Polis laying the foundation for a blockchain and crypto friendly state that he promised in his election campaign.
Investors need to learn what to look out for when investing in an ICO – or any crypto for that matter. There are a number of telltale signs that something is a scam, but these investors had no excuse. ICOs are illegal in South Korea and that should have been a big enough red flag for them not to invest. That being said, we hope that the scammers slip up and investors can recover their funds.