One of the biggest benefits and downfalls for investors in the cryptocurrency market is the initial coin offering (ICO). There are many people who are able to get in at the ground level with brand new tokens and exchange, but this crowdfunding method is also used by groups and individuals will less savory plans. TheNextWeb recently reported on exactly this type of scenario with Pure Bit.
Pure Bit seems to be a blockchain startup, and they recently hosted an ICO to raise funds towards their alleged venture. During the token sale, they managed to raise about 13,000 Ethereum, adding up to about $2.7 million. In the last few hours, TNW reported that the funds seem to have been moved entirely out of the company’s wallet, based on their transaction history. The website, which was once filled with information to lure investors, now comes up blank as well.
Pure Bit seems to have completely abandoned their project. Social media accounts are completely gone, and there are no users allowed in their former chat group with KakaoTalk. There still seems to be an archived version of the website, which shows that the startup was working to raise funds for a “mining coin,” and they were working to launch an exchange desk that would allow for trading of a native coin called PURE. Clearly, with the way that Pure Bit has left their customers, it doesn’t seem like anyone will be getting a return on their investment.
Along with their ICO, Pure Bit was trying to gain funds through an affiliate campaign that would provide users with additional tokens for referring new investors. The only way to get in on this campaign is with an initial investment of $1,000 (5 ETH), though the website is no longer available. The funding round only lasted for four days, even though the original plan was to leave it open until November 30th.
The blockchain space has been, unfortunately, plagued with these types of scams through ICOs. According to TNW, “reports suggested exit scammers have thieved more than $100 million worth of cryptocurrency over the last two years alone. Subsequent investigations hint the actual sum of stolen cryptocurrency could be even higher.”
Though the news media website brought up the idea that this could be a “silly marketing stunt,” they also noted that the idea of that kind of prank is “unlikely at this point.”