Have you ever felt so guilty for doing something that you ended up undoing what you did?
That’s exactly what happened (or did it?) to the CEO of the South Korean company Pure Bit a couple days ago. Earlier this week Pure Bit pulled an exit scam with their ICO for a cryptocurrency exchange. When Pure Bit executed the exit scam on November 13th, they had raised over $2.7 million since the beginning of their ICO on November 4th (13,000 ETH).
When the company conducted the exit scam, they erased their internet footprint entirely, but not before saying ‘I’m sorry’ on a forum. You can read more about the exit scam HERE.
To scam or not to scam?
What could’ve possibly made the CEO of Pure Bit decide to not just waltz away with the near $3 million in ETH? I’d like to think it was the fear of getting caught rather than guilt.
The moment the media became aware of the exit scam, every financial news outlet in South Korea began broadcasting the scam. Most international crypto news outlets followed suit (including CryptoChats) in spreading the word as much as possible in attempts to fight for ICO justice.
The authorities were alerted, the Ethereum address of Pure Bit on UpBit (South Korea 2nd largest crypto exchange) was tracked and frozen, and the scammers were stopped dead in their tracks.
Then justice, or fear, revealed itself.
Whether it is out of fear of the authorities, guilty conscious, or the total media coverage of the scam, Pure Bit released a statement apologizing for what they had done and the panic they caused.
What they have to say for themselves
“This is Pure Bit. First off, I would like to apologize to everyone that was affected by the ICO. Since November 5, I raked in 16,000 ETH and did not open a crypto exchange as promised. I kicked out everyone in our social media chat groups and disappeared without any message. I negatively affected investors in the project psychologically and financially.
“I made an unforgivable mistake that cannot be turned around, blinded by money. It has been less than a day and I have already started to suffer from guilt. Although it cannot be compared with the hardship faced by the investors, I also felt significant guilt. I sincerely apologize to all of the investors in the ICO who were affected by the operation.”
The CEO of the company also stated that he had made an ‘unforgivable mistake’ and was ‘blinded by money’ and apologized for the the attempted fraud. The CEO continued on the state that some funds have already been reimbursed and the rest of the 13,000 ETH will be returned shortly, or ‘what’s possible’. Pure Bit still has a third party fee to pay to the people who initiated the ICO.
South Korea’s policies
Lately South Korea’s Internet & Security Agency has been evolving its crypto policies to become significantly more strict regarding ICO’s and exchanges in attempts to reduce the number of scams that are taking place. Scams usually are conducted with internal management systems that are faulty with negative intentions, so in order to reduce the number of scams the Internet & Security Agency is taking measures to confirm identities of operators of ICO’s and exchanges.
While the Pure Bit CEO says that he became overwhelmed with guilt, it’s still hard to believe that that’s the only reason he decided to refund investors. The most likely cause the the total 180 degree turn on the scam, was the involvement of law enforcement. Afterall, if the CEO just feels so ‘guilty’ and torn up about the whole thing, then why did he do it in the first place?