Bithumb Recalls Suspicious Coin After Community Smells a Rat

South Korean cryptocurrency exchange Bithumb has cancelled its listing of a dodgy-looking coin after several parties identified discrepancies in its code and manner of distribution, according to South Korean news sources.

Bithumb is one of the biggest cryptocurrency exchanges in the world, processing more than $700 million in trades daily. The coin in question is called Popchain.

The website and white paper of Popchain were launched in March of this year, and April saw the release of 2 billion Popchain Cash coins. The first suspicious thing is that the company did not raise money with an initial coin offering, as is usually the case.

More worrying however was that 90 percent of all the coins were held by two wallets, and the rest by a further 16 only:

Source: etherscan.io

The coins were rapidly spread around after negative publicity was attracted, but the vast majority of the 200 accounts now involved hold only a tiny fraction of a percentage point:

Source: etherscan.io

What is Popchain?

The company’s a white paper is entitled “Popchain, Pan Entertainment Ecosystem”. It begins with the sentence: “Entertainment is an eternal topic of humankind seeking a better life.”

It describes a system which uses blockchain technology to process transactions involving digital entertainment: “POPCHAIN is a ‘live-streamable’ digital contents distribution service platform based on block chain technology which aims to create a new type of contents sharing economic system while protecting copyrights.”

However, according to local news source Cafe Nave, Popchain code as published in Github is copied wholesale from other cryptocurrencies. When users pointed out that the first line of the code was exactly the same as that of Monero, that line was removed.

Users also claim that fake accounts were invited to the Popchain Telegram group to create buzz, and that the market capitalisation of the company behind the coin (E&M) is considerably lower than the coin’s claimed market capitalisation.

Most damning of all though is evidence that Bithumb and Popchain share engineers:

Bithumb Cache engineers. Source: Cafe NaverPopchain code contributors. Source: Github

After the story made its way into the news, Bithumb released a statement (translated): “We are aware of the fact that many false facts that have not been confirmed have been circulated on the market and the anxiety about the Popchain transaction has been widespread. In this situation, proceeding with the listing on schedule will cause unnecessary controversy in the market. We will start trading after the listing of other exchanges is decided.”