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Richard Heart’s Hex Token is a Brilliant Scam

Richard Heart’s Hex Token is a Brilliant Scam
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Updated on December 2nd, 2021

Before you research how to buy hex crypto, you should read this whole article before deciding if Hex is worth investing in. It is clear where I stand from the title and will provide you will all the reasons why in this article.

Is Hex crypto a pyramid scheme? No. Is Hex crypto a Ponzi scheme? Not in the SEC pre-crypto defined legal sense. But don’t let that fool you into thinking that Hex is a legitimate investment product.

The Hex.com token should go down in the crypto textbooks as one of the greatest cryptocurrency scams in history because it is heavily marketed, has a large shilling army, has a ‘hook,’ and its main product feature is to create resistance to getting out of it.

99% of cryptocurrencies are scams, so there isn’t really anything new here, but most cryptocurrencies sell themselves to average crypto speculators as being some utility token for an ecosystem that is going to be the next great thing (which rarely ever pans out). These buyers are generally aware that they are gambling, and that is fine if they accept that.

Hex is different because it’s being sold as an investment furnishing returns, uses bank terminology, and is being heavily marketed to people who don’t generally buy crypto. It’s the only cryptocurrency that I have ever heard of to use ads to market in magazines, buses, taxis, physical mail and TV trying to bring in a whole new class of victims outside the regular cryptocurrency investors.

Why Hex Is and Isn’t a Ponzi Scheme

The legal definition of a Ponzi scheme is that newer investors pay interest to the older investors. That’s not quite what is happening here with Hex as it controls its own seigniorage and the interest comes from nowhere, through inflation. You aren’t being paid with Dollars or Euros as a Ponzi scheme would.

When Ponzi schemes were defined 100 years ago, private currency ones didn’t exist, so Hex doesn’t meet the legal definition. That’s where Richard Heart and his followers stop the discussion: “See, not technically a Ponzi, therefore not scam!”

Hex can mint new tokens until the end of time, but herein lies the gist of the problem: what will those Hex will be worth when it is time for you to cash out?

A Ponzi scheme requires an increasing number of investors to maintain the interest payouts and will eventually collapse when it runs out of new investors. In contrast, Hex requires an increasing number of buyers to maintain the token price, which ‘interest’ is paid through, otherwise the token price collapses. This is what what makes Hex analogous to a Ponzi scheme, only that there is one additional step in the process.

Your true interest rate will not be what is advertised; it will depend on what you can sell the tokens for when you close out your account, which may be higher or lower depending on how much additional capital is being brought into the system at that time.

This is why the marketing effort to lure in new buyers is enormous for Hex compared to typical cryptocurrencies, as shown below.

Get Rich With Hex Media Blitz

Advertising in the Economist Magazine. Source: Twitter
Hex on Buses
Advertising on Taxis
Hex Ad in Subway
Video Hex Ad on NYC Truck: Source
Yes, “someone” did!

Additionally, multiple people have reported receiving physical Hex spam mail to their homes with their names from the Ledger hack (here, here, here, here and here). Creepy, and unethical.

Then watch this comical TV commercial that aired on MSNBC with yachts and money flying around with the spokesman saying “people are getting rich, truly rich” before it even officially launched. Hex is designed to cater to your greed.

What Is Hex Crypto?

Hex is a token on the Ethereum network executed by a smart contract and the website advertises itself as a place to earn 40% per year with “certificates of deposit.”

You think that the 40% per year “interest” is your first clue that this is a scam?

Pro-Tip: Axos Bank offers the highest return on a savings account: 0.61% APY

Hex bears a lot of similarities to the Bitconnect Ponzi scheme that failed in 2017. In fact, it’s almost as if the scammer behind Hex used Bitconnect as a springboard to make an improved scam. Hex has been very careful with the marketing language on the website and product design features to both appear legitimate and to avoid legal trouble.

There is even an entire page on the Hex token dedicated to why the product isn’t a scam and generously educates the reader on what technically constitutes an illegal Ponzi scheme and a Pyramid scheme and why this product doesn’t legally qualify.

Usually legitimate investment products don’t need an entire section educating you on scams and why their product doesn’t meet the technical requirements.

I think this page is actually targeted towards any SEC or financial authority law enforcement officer that happens to come across the product rather than everyday readers to preempt an investigation. Crypto is largely unregulated at this point in time so a lot of sketchy stuff continues to exist out in the world. The SEC only really seems to perk up when a product fails and lots of investors start to complain.

As mentioned above, Hex may not fit the legal definition of a Ponzi or Pyramid scheme only because this is the first time in history that the schemer has controlled the seigniorage that victims were receiving as interest. The scam wouldn’t work if the advertised returns had to be paid in any other asset that Hex didn’t control.


Since Hex is marketed to lots of everyday people, I want to make a distinction about what an audit on a cryptocurrency means, since Hex mentions frequently in its marketing materials that three different auditors have audited its contract.

To a layman, they might think that the statement means that a professional auditor like PricewaterhouseCoopers came in and reviewed it and found out it’s not a scam, or something to that effect.

But that’s not what it means. Auditing in crypto-land means evaluating the computer code for bugs. Having sound code doesn’t absolve it from being a scam if the code is written to be… a scam.

Who Founded Hex?

The founder who goes by Richard Heart for marketing (his real name is Richard J Schueler). There’s nothing wrong with using a pen name except when the point is to hide a long history of shady businesses involved in spamming Viagra and anti-aging pills (which he was successfully sued for in the early 2000s) and legal trouble in Panama.  

He was even spamming courses on “how to spam” and avoid paying taxes on the spamming earnings. Fear of Missing Out (FOMO) is a great sales tactic that Richard Schueler uses continuously in everything he is involved with. Here in 2003 he offers up that he was a 23 year old multi-millionaire from spamming.

Furthermore his own blog documented other shady businesses such as selling stereo equipment he didn’t own and then turning around and giving the buyer sub-par equipment.

Does a scammer ever reform, or are they always out looking for their next mark? Do you want to put your money in a product created by a conman?

It is no surprise that since the crypto world is largely unregulated and is like the Wild West, that he would have gravitated to this space to enrich himself.

And enrich he has. Another one of the ways he promotes Hex is by flashing his riches and comically attributing the success to his own product.

Well, yeah, Hex.com has been amazing for HIM. Bernie Madoff’s scam business was amazing for him and early investors as well for dozens of years.

Social Media Shill Army

He has had a pretty public persona for the last few years doing podcasts, and showing up to cryptocurrency conferences and harassing presenters about their cryptocurrency backgrounds. For instance, when Craig Wright falsely claimed to be Satoshi Nakamoto (anonymous Bitcoin founder), Schueler, who was sitting in front, very aggressively called him out on this in front of the whole crowd. This led to a big surge in social media followers.

Ironically, he has called basically anything other than Bitcoin a scam until he launched his own offering.

Since his large group of social media followers were the first ones to get into Hex and have the most to gain from its success, his product came with its own army of Hex shillers and defenders, who call themselves ‘Hexicans.’

Hexicans are a pretty toxic group and seem to take it personally if you say anything bad about Hex. Of course, this makes sense, since if you get in early enough on any scam, you too can make a lot of money at the expense of later investors and you want to protect your pile of gains. They roam around on social media advertising it to others and attacking anyone critical of it, usually in coordinated brigades.

They follow the ABC‘s and are always looking for additional ways to market Hex to others, including creating thousands of YouTube videos and even commissioning a documentary (whose creator recently reached out to me) on Hex and Richard Heart. The funding was only trickling in for the first 50 days until someone (guess who!) contributed about $450,000 in one go, which greenlighted the project. That contributor’s account balance shows more than $330,000,000 in value, 90% in Ethereum.

What Is Interest?

When banks offer certificates of deposits they refer to federally insured bank notes and the saver is required to lock those funds up for an agreed amount of time to receive a higher rate of interest. Banks offer these because they can plan better around their federally mandated reserve requirements and lending portfolio. Everyone is familiar with them: you put in dollars, and you get dollars back later.

The Hex “certificate of deposit” is based on a smart contract on the Ethereum blockchain that follows a programmed set of rules. Similar to banks, the longer you lock up your funds, the higher your interest rate is.

But that’s where the similarities end.

You must first trade another cryptocurrency for Hex using a decentralized exchange and then when you lock up your Hex, you get more Hex tokens later.

Do you see where this is going?

This whole scam could not work if the requirement was to lock up an asset and get paid interest in that asset for an asset that Richard Schueler didn’t control and create out of thin air.

Where’s the certificate of deposit that pays 40%, or even 20%, in Bitcoin or Ethereum? It can’t exist.

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How Does Hex Crypto Make Money?

In short, it doesn’t.

When banks give you interest, it stems from economic activity. The bank takes your money, loans it out, gets a return on the money, and then pays you part of that return. A commercial bank’s business model is to capture a spread between short term and long term interest rates. They borrow short, and lend long. That’s the core of their business and why they offer savings and checking accounts in the first place: They leverage other people’s money.

With Hex, there is no underlying economic activity happening at all. It’s not even real interest.

All the Hex contract code does is mint new inflationary tokens every year and then distributes the inflation to those who have agreed to lock theirs up for an chosen amount of time (technically Hex converts to T-shares, which is just a computational efficiency that reduces circulating supply figures but isn’t germane to the criticisms I make in this article).

Those who lock up tokens also get half the penalties from those who unlock their funds early, or get this, forget to unlock their funds within two weeks of the agreed upon period. Richard Schueler generously gives himself the other half.

Etherscan Source Code

So in other words, the sole purpose of the Hex contract is to redistribute value from some token holders to other token holders primarily through dilution, but occasionally when someone requests their money back earlier or later.

Why Is The Hex Interest Rate 40%?

The 40% number comes from the requirement that only people who lock up their funds get paid the inflation and currently only about 10% of Hex token buyers have locked up their funds. The inflation rate is 3.69% arbitrarily, for undisclosed reasons.

You have to wonder why only 10% of Hex buyers have locked up their funds if to get the ‘interest’ you have to do so and whether that percentage will increase in the future.

Well the main reason is that Schueler owns a disproportionate number of the tokens (shown later) and has not locked them up in order to keep the advertised rate high. Since he didn’t pay for these tokens, losing 3.69% of the value every year to inflation is of no consequence if it attracts more buyers clamoring for the 40% APY and therefore drives up the price of the token far higher than his inflation losses.

This is a two way street of course. Since 90% is freely available, your bigger risk is that large quantities of Hex will be dumped and the price of the token will drop to a level far lower than your cost basis and inflation earnings. With 90% of the tokens ready to be sold at a drop of a hat are you ready to lock yours up?

On Staking

We need to discuss Schueler’s use of the word ‘stake’ here when referring to locked Hex tokens.

Older cryptocurrencies like Bitcoin and Ethereum require millions of computers (i.e. ASICs) running specialized number guessing hardware all competing against each other to secure the network. It uses up an enormous amount of electricity and only those who can afford the hardware get the rewards. This is referred to as Proof-of-Work.

In contrast, the staking concept where investors lock up their funds for a period of time is the norm with newer Proof-of-Stake styled cryptocurrencies. It’s democratized as anyone can participate in rewards with any amount of money and is more energy efficient because people bet on datacenters which don’t require random number guessing hardware.

The staker needs to research the datacenter to make sure that it has a legitimate group running it, won’t behave against the interests of the network, and doesn’t have long periods of inactivity, because if it does, the staker’s money will be slashed. Therefore, it is a decentralized way for people to put money where their mouth is and as a reward, they earn a portion of the datacenter’s fees from processing those transactions.

When you ‘stake’ with Hex, you aren’t securing a network, voting on governance or facilitating any underlying economic activity at all. It’s a complete misuse of the term and there is no Proof-of-Stake at all. You are just agreeing to lock up your funds so that there won’t be selling pressure.

What a convenient product feature.

On Inflation

Inflation is never a good thing, but in the case of Proof-of-Work (PoW) cryptocurrencies like Bitcoin and Ethereum, it is a necessary evil to incentivize miners to secure the network. You couldn’t have PoW without it. As cryptocurrency adoption multiplied over the last decade, the growth in demand vastly outweighed the effects of inflation so people really didn’t notice it.

However, the inflation in Hex does not stem from computer work in the form of electricity like in the case of Bitcoin or Ethereum. Inflation in the Hex system is completely arbitrary, unnecessary and solely exists to create funds out of thin air to pay people. Likewise, if Schueler and the Hexicans can rope enough new buyers into the scheme to drive up the token price or keep it level, they won’t notice the effects of inflation either. Now you can understand the vast marketing and shilling efforts.

Everything else being equal, the expected return to total Hex capital from inflation is 0%.

It’s like cutting up a sandwich into smaller pieces – you don’t have a bigger sandwich.

When an equity security conducts a 2-for-1 stock split, there exists twice as many shares, but the total capital stays the same because the share price is halved.

Hex is like buying a foreign country’s currency that only printed extra bills to pay “interest.” At some point you have to convert it back to your own currency to spend it. When you make that conversion, supply and demand will reduce the value of what you thought you earned.

There’s nothing magical about the 3.69%; it could have been 1%, 2%, 5%, 10% or anything in between to create a different perceived rate of interest with a differing level of token dilution.

Richard Schueler could have written the smart contract to say that every year a zero will be added to every locked account balance. Would anyone actually believe that they were 10x richer? Of course not, so why does the more subtle way that Hex uses this principle fool so many people?

Fool’s gold does not turn into real gold.

Scam Dynamics

In this section we take a closer look at some of the aspects of the Hex crypto token.

How Hex Started

Hex was carefully crafted to avoid the various legal tests of typical pyramid or Ponzi scams. For instance, it can’t be considered a multi-level marketing program or pyramid scheme because it only had one level of referrals built in to the adoption phase.

It doesn’t technically constitute a Ponzi scheme because it’s not only new investors that are paying off old investors.

Hex also doesn’t promise returns, it says that its returns are “designed by the code” as if simply decreeing investment returns could work in the real world.

If you cruise over to the very bottom of the page, you will see the disclaimers page where Richard Schueler has put in a copious amount of them.

It’s not a security, I swear!

I’m not selling you anything, it’s just code out on the blockchain!

He can personally decree that it is not a security but that does not constitute what a legal authority would ultimately rule on what it actually is. It looks like he is attempting to thwart the SEC from knocking on his door by carefully explaining why it doesn’t adhere to their tests.

The Richard Heart Initial Coin Offering (ICO)

During the first year’s claim period, you’d send Ethereum to the contract address, known as the origin address, and you were sent Hex tokens. If you wanted to change your Hex tokens back to Etheruem, you’d have to go to go somewhere else. You don’t ever get a refund from Schueler’s origin address. He keeps everything you send him, scot-free and if you want out, then you are on your own to find an exchange offering liquidity.

In interviews he always dodges the question of who owns the “origin address” that receives Ethereum and also receives half the penalty for people who unlock too early or late.

The reason why he will not answer that question is because the ICO was deemed a security by the SEC and he basically conducted an illegal one without a filing and registration. He can’t deny that he received an asset and traded it for another asset of his own product. He knows it was technically a year round ICO.

About $7 million of Ethereum was withdrawn from that origin address about a month after launch. It was conducted with 36 transactions of 1,337 ETH. 1337 is “leetspeak” for leet, which means “elite.” Hackers in the 1990s referred to others as elite if they had the best hacking skills being able to infiltrate corporate servers and websites. To me this looks like a cocky message basically bragging about how he bilked millions of dollars out of suckers.

Also, during the first year, there was nothing stopping Richard Schueler from creating a continuous loop by sending Ethereum to the origin address, receiving Hex, then sending the received Ethereum to a different address (through a laundering mixer to obfuscate this activity), and then sending it right back to the origin address for more Hex. He could mint himself as much Hex as he wanted and he did (more on that below).

How could anyone ignore that fact alone and not see how much of a scam it is?

Supply Reduction

This is really the crux of the brilliance of this scam. It’s like Hotel California: Your money checks in, but doesn’t check out.

By incentivizing Hex buyers to lock up their tokens for a number of years, it removes selling pressure and reduces the float, allowing the marketing efforts to have a more powerful effect of luring in new buyers and pushing up the Hex price.

The goal of course is to create so much FOMO that the price skyrockets and attracts an even larger set of buyers so that there will be enough salmon swimming upstream to counteract the selling pressure of early promoters.

Early investors in every Ponzi and pyramid scheme make money along with the pinnacle scammer and they will defend the product without bounds to protect their newfound wealth.


It started with lots of marketing through traditional print and online media as I showed at the beginning of this article. Schueler also paid for professional press releases to show up on financial news sites with comical claims that Hex has the potential to “eradicate middlemen payment companies such as PayPal and Venmo, as well as impact credit card companies like Visa and MasterCard.”

So which is it, a payment app or a certificate of deposit? In fact, Hex doesn’t have the ability to do any of that because the infrastructure for sending tokens or payments comes not from his token, but the platform his token is built on, Ethereum. It’s simply more grandiose claims to lure in buyers hoping to jump aboard the next Bitcoin, Tesla or transformative technology.

As stated before, this is unusual for a cryptocurrency project to advertise because search engines usually outright ban any advertisements related to crypto and print media is expensive.

Finally, the original name of the project was called “BitcoinHEX.” Remember in the previous article how I stated that usually crypto scammers seek to exploit name recognition and legitimacy by using another crypto’s name? Hex has absolutely nothing to do with Bitcoin, since it is built on the Ethereum network. But most people have heard of Bitcoin and its massive success, so he wanted to give the allure to newbies that it was somehow related.


No scam would be complete without advertising how rich people are getting along with some Lambo shilling. In addition to a bunch of exotic cars purportedly paid for with Hex winnings, there is a whole cache of items on the webpage. Clearly this is a marketing technique to bring in ‘get rich quick’ hopefuls.

Instant User Base

To get it started with an instant user base, Richard Schueler offered free Hex tokens to anyone who had Bitcoin by a deadline and then submitted a claim to the website. As I also mentioned in my previous article, it’s much easier to grow a community when you instantly mint thousands of people who didn’t have to actually commit any new money to be a part of it. And since those Hex tokens were minted out of thin air and locked for a year, it didn’t actually cost him anything to give them out.

Shortly after launch he could claim that thousands of people had staked Hex in his “certificates of deposit” even though they didn’t put a dime into them. People are herd animals and feel more comfortable if there are lots of other people already involved in a product.

Adoption Amplifier & Referral Program

Schueler incentivized people to “act fast” to get a bonus.

And users were incentivized to bring in others through their referral program. Your users become your marketing shillers for free. A few websites started up Hex affiliates just for the purpose of getting the 20% referral. They didn’t have to commit any of their own money to shill the product and earn.

Richard Got a Copy of Adoption Bonus and Referral Bonuses

During the early adoption phase he also got a copy of what everyone else got. In other words, when someone exchanged Ethereum to Hex, Schueler got half of the Hex value and 100% of the Ethereum value.

He already got the Ethereum in the exchange, so why did he get additional Hex too?

And when someone was referred by another Hex user, he also got a copy of what both the referrer and referree got. Gee that’s fair.

Etherscan Contract Code

In case it’s not obvious, each time someone used the adoption method or was referred, it was further dilutionary to the Hex token pool by 2x the claim amount.

It should be pretty obvious the only significant whale in the Hex system is Schueler himself.

The Hex Token Distribution

Which brings us to the next point.

In an effort to pretend that there are more investors than there really are and to obfuscate the distribution of tokens, Richard Schueler created a huge number of wallets to hold his Hex stash and create an illusion of a thriving community.

One redditor analyzed the distribution of wallet addresses and found that one single address sent HEX to 173k addresses in large batches, mostly small amounts of 100 and 101 HEX and the addresses have no further activity. These are throw-away accounts since the Ethereum gas would cost more than the value of the wallet addresses to move the Hex out. Schueler loves to brag about how many unique wallet addresses have Hex, so here’s your reason why.

Furthermore, the distribution of Hex shows that it is highly centralized. This shouldn’t be a surprise given how much goes straight to Richard Schueler’s personal origin wallet and that he had an entire year to mint himself as much as he wanted with ETH recycling.

How Much Hex Does Heart Control?

Etherscan provides a tool to look at the top 500 token holders. Almost all of them were created in blocks on the same day, within the same hour. Try to find a single account in the top 150 that wasn’t funded by the origin account. Furthermore, there is a whole block of accounts that all have the same exact amount in them.

Yup, you guessed it, all funded by the origin account.

In fact, I couldn’t find a single Ether account in the list of 500, from randomly clicking, that had any activity beyond just funding Hex. Geee, suspicious.

Then check out this Ethereum address, with funds originating from a money laundering mixer all paying the gas fee on 200 accounts each with 350-400 million dollars in Hex tokens. See for yourself and do the math.

These simple observations show that Richard controls more than 50% of the entire supply of Hex. His laziness to use a single account to fund the gas fees on 200 other massive accounts is much appreciated because it made the analysis much easier to collate.

So how much Hex does he control in total? I originally speculated from the above points that an automated account analysis program would show his ownership of up to 80%. Well as it would turn out, someone has actually managed to collate the addresses funded from the origin address and found Heart controls 88% of all Hex! 88%, just wow!

If Richard himself didn’t want to pay a 20% founder’s tax on a coin, why does he deem it acceptable for you to pay an 88% founder’s tax? He didn’t even attempt to make the product remotely fair and he’s playing anyone who buys into it for fools.

I’ll note that he can’t get that value out of the system unless lots of future suckers buy in to prop up the price while he is unloading, which is why the marketing efforts are more broad than you typically see for cryptocurrency.

But why obfuscate his holdings? Would there be fewer Hex token buyers if everyone knew he controlled so much and the main point of the token was to enrich himself? I think you know the answer.

Problems With The Size of Hex

Hexicans love to brag about how Hex is a ‘top 3 coin,’ currently worth $159 Billion (their preferred coin ranking site, whose owner has admitted to investing in Hex, recently de-ranked them down to 9).

  1. Hexican’s preferred coin ranking list is basically anything other than the gold standard, CoinMarketCap, because it lists Hex at #201 instead of #3.
    • Not only does CoinMarketCap have an evaluation process that attempts to weed out low quality projects, one of their main requirements to list in the top 200 is that a token must be listed on a centralized exchange with material volume, such as Coinbase or Binance.
    • It’s curious why these retail exchanges will list dozens or hundreds of other tokens, but specifically exclude Hex when it is so large. We can only speculate as to why, but exposing their customers to all the risks I have brought up in this article could be a risk to their regulatory obligations if it ends badly for their customers.
  2. It’s so large, but Schueler and Hexicans always invoke the low price fallacy: “It’s pre-viral because it is only $0.26.” Bank of America could split their shares 100-to-1 and have a stock market price of $0.47 but that wouldn’t make it any less of a $250 billion company. Price has no bearing on future opportunity or cheapness without considering how much supply exists along with it.
  3. If Hex were to 4x in size at this point, it would exceed the valuation of the platform it’s built on, Ethereum (which reminds me of the Palm Pilot craziness of the Tech Bubble).
  4. Having a large market cap combined with permanent inflation is an issue. Think about how $159 billion*3.69% is about $5.8 billion in new tokens a year that must be absorbed from new buyers, and that is only if the price stays where it is currently at. Presumably many will ‘re-stake’ again and again keeping the supply off the market for a while, but that is only delaying and stacking up the eventual unwind.
  5. Trading volume for a token of this size is quite low. Price discovery comes from volume and basically any other coin in the top 100 has multiples more. You can compare apples-to-apples by taking the volume and dividing by the marketcap to get a ratio. A typical trading ratio is around 0.02-0.06 or more. As of this writing, Hex’s volume ratio is less than 0.00035 which means it has 1/57th of the trading volume of its peers.
    • This low volume ratio is NOT a reflection of Scheuler’s outsized ownership interest or the lock-in product feature keeping supply off the market because CoinMarketCap’s volume calculation only considers the circulating supply of $43 billion.
    • If you consider the entire supply in the ratio, it’s 0.00009522, or about 1/210th its peers.
    • This volume disparity is somewhat of a result of not being listed on centralized retail exchanges, but it is uncertain exactly how much.
    • The point being that low volume anythings are easier to manipulate.

Schueler will tell you that market cap and volume do not matter, because “you can’t make money from the market cap or volume,” but of course it matters. Market cap is essentially the “account balance” of all token holders in the system and the volume is the capacity to unload those balances.


Watch a few Youtube videos of Richard Heart getting interviewed by someone critical of Hex and see his replies. When he takes a break from all the name calling and insults, you’ll find that he is very adept at manipulating semantics and introducing red herrings into his arguments.

False Analogy to Bitcoin

His favorite rhetorical device is his comparison of Hex to Bitcoin. He claims that Hex offers the best opportunity to buy now because it’s ‘just like Bitcoin in the beginning.’ In its beginning, Bitcoin had:

  1. Low liquidity.
  2. Large founder’s share.
  3. In hindsight, those who held the longest had the best return.

And Hex has low liquidity, a large founder’s share and had a quick initial gain! See, same same! Buy, buy, buy!

But cryptocurrency was in its infancy 11 years ago: few people had heard of Bitcoin, it was the only digital currency available, you could only trade it peer-to-peer, and you could mine it on your own home computer. It was a big gamble that cryptocurrency would even have any value at all many years into the future because digital currencies had been tried before and failed.

When you only had a handful of people experimenting with a new technology that had a limited practical value at the time, of course, there is going to be low liquidity and a large founder’s share. However, Bitcoin wasn’t engineered to have those features like Hex was.

There are now over 10,000 cryptos covering $2 trillion in value, dozens of retail crypto exchanges, ETF like trusts that buy and hold Bitcoin, and futures contracts on it: cryptocurrency has not been in its infancy for 5+ years now.

Additionally, Bitcoin exists by itself. Hex depends on another cryptocurrency, Ethereum, because it isn’t even an independent coin; it’s a token.

To make the jump that Hex is like Bitcoin because they both, well, use blockchain, is completely nonsensical, but it has the contrast about the size of the Grand Canyon.

Hex’s Purpose

Ask yourself, what innovation does Hex add to the table aside from being a self enrichment scam?

Bitcoin’s purpose wasn’t to furnish its users with investment returns, which is Hex’s only purpose.

Bitcoin was invented to facilitate digital payments and solved a double spending problem for digital money. Bitcoin was the genesis of cryptocurrency and it didn’t require sending the founder money to participate in it. Bitcoin also has a fixed terminal supply.

Hex is none of that and anyone can clone it with a few mouse clicks.

What does Hex do? Spawns more Hex.

Schueler saw that other scammers were getting rich creating scam-coins and just wanted in on the action. He only put a little more thought into the storyline of why you should buy.

Hex.com Coin/Token Review Summary

Pro-Tip: Track your net worth and see a detailed monthly expense report across all your accounts with Personal Capital.

Hex is the most blatant scam coin where it is written right into the contract that the founder could mint himself as much as he wanted for the first year of the contract’s existence, that he got a copy of referral bonuses and adoption claims, and that he still gets half of all penalties and fines in the entire Hex system leading to an obscene founder’s share of 88% of all Hex tokens.

As such, Richard Heart has total control of the ‘interest’ rate everyone receives, has the ability to front run every large ‘stake’ that is ending, and his greed led to an enormous amount of capital that must be brought in to absorb the freshly minted tokens to keep the price level (around $6 billion per year, the entire size of Cosmos, every year).

I’m pretty sure that Richard Heart won’t ‘rug pull’ because a smart parasite doesn’t kill its host, but he will dump his massive holdings onto the masses over time in order to cash out if he is successful in gaining wider adoption.

The most common (only?) rebuttal by Hex shillers is it is not a scam because their account balance has gone up or they’ve actually sold and made money. Yes, you too can make money with scams if you buy earlier than the majority. People also thought that they were getting rich with Bitconnect, but only those that sold before the bottom fell out one day, actually made any money. Early investors also profited with Bernie Madoff.

Anyone who buys into this scam will feel confident about their wallet balance until the token begins a downward death spiral as a result of freshly minted tokens being unloaded and overwhelming new investors (are we at that stage now?).

Since there isn’t an economic driver underneath the Hex covers, those that actually understand the mechanics of the token are just betting that a greater fool is going to come in later and buy not only their tokens, but an additional 40, 80, or 120+% of them at a higher price years later. Anything can happen in the short term, but it requires a huge expansion of Hex buyers over time for that fantasy to materialize.

A little marketing does wonders in the crypto world, so Richard Heart and the Hexicans use that principle extensively to find these buyers but at some point the smoke and mirrors will be evident to everyone else that remains and there won’t be any buyers left.

When a token has gained 2,000x in two years as a result of marketing and manipulation, there are a lot of people who have contributed minimal amounts of their own capital, but are showing a huge account balance and are counting off the days until they can sell to someone else and realize that massive gain. These are people who are not going to tell you to hold off on buying it. It’s best not to ask the ones who benefit from your ignorance whether you should buy.

It’s right in the name: You are being Punk’d.

Feel free to comment below, but skip the insults, as they’ll be deleted.

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After graduating with $75,000 in student loan debt, Ryan began a professional career in finance, aggressively saved and invested and became a self-made millennial millionaire in early 2019. He holds a Master's degree in Computational Finance, a Master's degree in Economics, and a Bachelor's degree in Mathematics. His two passions are investing and traveling.

105 thoughts on “Richard Heart’s Hex Token is a Brilliant Scam

  1. Excellent article. But this follows into grandma‘s rule. If something is too good to be true it usually is. But thank you because individuals like myself don’t have the understanding computer knowledge and can get scammed. I was put off by the by the necklaces he wore actually in the interview. That screamed manipulation and the last guy to be real was Steve Jobs but the turtleneck did not work well for Elizabeth Holmes. Michael Saylor- is Michael Saylor last I heard. Alarm.com is running my security system. It seems like Microstrategy is a palpable company -he may be totally wrong with bitcoin but he will sink his company with it. What company is here that this guy has done?

  2. You haven’t even touched on their new cultish sacrifice thing with pulse chain. A decision they have it seems they have made because new entrants can’t afford current Eth gas prices to lock up their tokens.

    1. And the “sacrifice” was for that anti-aging research group which also has a cultish vibe. All these guys are worried they won’t have enough time to spend their millions and billions.

      I haven’t looked much into Pulsechain since it is still a testnet beta. I do wonder what angle Heart has dug out for himself inside it though. Who knows, maybe it’s a fair product this time, but I have my doubts.

      1. Anti-aging how uninformed you are. That field of medicine what they are trying to develop is more groundbreaking and lifechanging than any technology ever in the history of mankind. You should look into it. If we as world would pool our energy into perfecting it life as we know it would change. Body cells that don’t break down from being copied over and over again. No cancer (which I have) No neurological diseases. No Heart disease, No autoimmune disease, And yes you would basically stop ageing but ageing is just the rapid break down of cells.

        Search any group and tell me there isn’t some kind of cultish vibe. I like to tie flies for fly fishing. Crazy Cult! People are so serious about their fake bugs!!

        “Sacrifice” It’s a term used so people understand they are expecting NOTHING in return. may work out may not. If they called a sale you would expect something. If you give something with expectation of profit from the work of others then you are creating a SEC defined Security.
        When PulseChain launches it will have zero value at the instant of launch.

        1. The founder of that group literally wrote a book on “ending aging” [link]. Maybe it is you who is uninformed? The sell foundation of youth fantasies for the gullible.
          Usually fly fishers don’t have a vested interest in trolling the internet and trying to bring more people into the bait they use. That’s the difference with Hex, it requires bringing in more people to prop the price up.
          Didn’t the sacrifice get them some tokens on the Pulsechain? Doesn’t sound like that is nothing. Hard to say that Pulsechain will have zero value when there is a whole community of Hex shillers who will be trading in it on day 1.

          1. Ending ageing is exactly what it is. How would your summarize putting a stop to all diseases caused by cellular decay. Good marketing to use a term the old rich people will respond to. Take a deep dive into the Research side of the website you will click your way to some of the top universities.

            All cryptos/ stocks/ sports cards/ actually every asset, requires more people to come along to prop up the price. You just look down on Hexicans because they have to use tacky grass roots marketing. Bitcoin and Eth have more shills( people bringing in more people to prop up the price) than all the other coins combined. It just doesn’t look as seedy because its got more money polishing it. It’s the exact same thing.

            I have a close contact that Is up over $5,000,000 on Eth. If he would have shilled harder to me back in 2015. I might be right there with him. He would have had to pull out all the stops and had to look very seedy trying to convince me to spend a weeks wages on fake internet money.

            Sacrifice got you points. which get you PLSs. semantics I know but that really is a moot point.

            Can You link me to any other articles you have written about possible scam coins.

  3. This is totally lie, it just perform like btc. It is too early to say. I love RH what he has done for people. Now if you believe this stranger, as he explains he won’t debate RH. And still you think is ponzi as people used to say to btc I should say people still say btc is ponzi. If I am too doubtful still I will take risk with 5to 10 %, because this time won’t come back neither this stranger who wrote wrong information. Thanks friend good luck. I think hex 100% legit and think what if RH die, this smart contract change this world.

    1. As I stated in the article, Hex doesn’t meet the legal definition of a Ponzi, because ‘earnings’ are paid in Hex: it’s done differently. In a Ponzi, new investors must be brought in to pay the old investors with an actual currency. With Hex, all investors have their token devalued 3.6% per year and then those extra tokens are paid out to those who have agreed to lock them up for some time (stakers). Again, they aren’t being paid from economic activity, but are being paid from the Hex pool capital, taking from other Hex owners. Robbing Peter to pay Paul is not a legitimate business enterprise.

          1. Was just a test contract. My understanding of main the driving force behind Pulse is the simply unusably high gas fees on ETH currently.

      1. Hi Ryan, I think this is an inaccuracy. There is no “hex pool capital”. Inflation is minted only to those staking the coin. No one is taking HEX from other owners.

        1. That’s what inflation is though. You are devaluing the value of each Hex owner through the inflation, but then turning around and paying the stakers. Since stakers get paid, but unstakers don’t, effectively unstakers are paying the stakers.

          1. Okay, I understand what you’re saying but you’re dismissing the act of staking in HEX as “non-economic activity”, however you are deferring the ability to spend your HEX today in order to get more further down the road. You are committing to not selling when the price fluctuates. HEX could go to zero and if you’re staked you can’t get out without paying an emergency end stake penalty. You are being rewarded in HEX for that delayed gratification (very parallel to the traditional bank CD). The people who have not staked took no such risk and could trade in and out of the currency as they pleased during that period of time.

            So you can say “they are effectively paying the stakers” but that relies on the assumption that you aren’t engaged in economic activity by staking and in fact you are, as I have described above.

            Another point to consider: Bitcoin also inflates and is paid to the miners who commit their hash rate, and then that dilutes non-miners of bitcoin. So by your analysis, is Bitcoin also “close to being a ponzi?” HEX just switched the consensus protocol and pays the inflation to the people willing to forego trading it, and accrue economic benefit for their effort.

          2. I disagree that ‘waiting’ or ‘deferring action’ (i.e not doing anything) constitutes economic activity. If that were the case, lazy people would all be rich. And a bank doesn’t offer CDs to encourage delayed gratification for investors, it offers them to have assurances for their own book of reserves.
            Both Bitcoin and Ethereum, which Hex is built upon, are proof of work. No cryptocurrency could not exist without the inflation for performing work. Hex could exist without inflation because no work is being performed. The inflation is arbitrary. That’s the difference.
            So, yes, technically any non-cash flow generating asset that requires bringing in other buyers to attain its value could be considered a Ponzi, if I am being loosey-goosey with the technical legal definition. But like I said above, Bitcoin invented a solution to a problem, is unique and has a vast network. The only thing that Hex seems to have invented is lots of FOMO marketing, a product feature that strongly discourages getting out, and a product feature that enriches its founder. Anyone can duplicate the Hex token with minimal effort and you can get an equivalent product. In fact, “Rex” has done just that. You can’t duplicate Bitcoin, even though lots of spawns have been attempted.

          3. Then Lazy people would all be rich? What are we even talking about, guy? We’re talking about within the framework of buying and holding a cryptocurrency called HEX, not speaking in generality about people and life. By your logic, there is no economic activity you should dislike bitcoin even more, all people do with bitcoin is buy and hope number go up. There’s no real medium of exchange to speak of.

            Furthermore, the analogy to a bank CD is just that, an analogy. Your ROI is proportional to the duration you are willing to lock up your funds for. Yes, the bank has a different reason for why they want your funds then why “HEX” wants you to stake, but honestly the difference only drives home why HEX is better than a CD. A Bank CD involves your reliance on a third party and HEX is you and the contract, no middlemen, trustless.

            Re: “Both Bitcoin and Ethereum, which Hex is built upon, are proof of work. No cryptocurrency could not exist without the inflation for performing work.”
            HEX draws inspiration from bitcoin, and you could claim HEX for holding bitcoin during launch… I don’t know what you mean it is built on. Re: Ethereum, correct it’s an ERC20. But you’re assertion that no cryptocurrency could exist without the inflation for performing work is increasingly outdated. Binance is proof of stake, Cardano is proof of stake, Solana is proof of history. Eth 2.0 (whenever it eventually arrives) will be proof of stake. Pulsechain is going to be Proof of Stake. The idea that you somehow need Proof of Work is already outdated. HEX will be copied over onto Pulsechain and you will have a copy of pure proof of stake HEX.

            Re: But like I said above, Bitcoin invented a solution to a problem, is unique and has a vast network.

            Bitcoin is old, slow, been hacked multiple times, and has never actually solved the problem it set out to solve. It never became a medium of exchange and none of the layer 2 solutions have ever gotten adoption. It’s just a speculative asset that has the benefit of network effect. Why are you celebrating this? It’s like walking around and touting your nokia flip phone. Software is always getting better and coming out with better versions of previously innovative technology which Bitcoin once was.

            RE: The only thing that Hex seems to have invented is lots of FOMO marketing, a product feature that strongly discourages getting out,

            A project that discourages you from getting out- and what’s wrong with that? It’s trading and selling bitcoin that would have caused you to miss out on 65,000x gains from just holding bitcoin (show me a trader who managed to beat the buy and hold strategy on bitcoin). HEX discourages you from doing that by paying you interest to delay gratification and see the bigger picture of where crypto is going. Why are you knocking that? The ability to trade feeds the fire of the worst aspects of human psychology. Trading gets your rekt and only serves to enrich middlemen. Staking HEX means you’re not selling when the price dips, and you’re later rewarded for patience two-fold when the price appreciates again and you’re paid the interest for staking. That’s such an improvement over bitcoin.

            RE: and a product feature that enriches its founder.

            – oh and what’s so wrong with that? Do you also take issue with Bezos and Musk being enriched for their entrepreneurial efforts? The OA has not been staking at all, and is diluted by the staker class. It gets half of the EES funds and the rest are distributed to the staker class. It’s just bizarre to me that this criticism exists. Founders should be enriched for creating something of value. HEX has and will continue to do that because it’s got an incredible product-market fit.

          4. My point is that doing nothing is not doing something. Doing nothing is not adding to the GDP or any other measurable concept of economic activity which is what would drive profits to pay interest.

            Clearly the marketing was intentional to call it a “certificate of deposit” to associate it with the concept of a bank otherwise he would have called it something else. DeFI is not automatically better because with a bank you have recourse and your funds are federally insured. Having middlemen isn’t what is preventing banks from paying 40% interest. Why no certificate of deposit that pays Bitcoin or Ethereum? Well because those returns would actually have to be generated somehow, kind of like what Nexo and Celsius do by loaning money.

            I didn’t say that you need proof of work, I said it work needs to be performed. Proof of stake still performs work, just less of it and in a more centralized manner. Instead of randomly guessing numbers with a million ASICs, a la Bitcoin, there’s 100+ datacenters processing their blockchain, voted on by individual stakers to behave well. Even staking in PoS has a purpose because you have to put money on the line. It still costs electricity and space to house those facilities. Hex would not exist as it does today without being an ERC20 token. Sure, he could create a new smart contract on another platform, but those platforms are the foundation for Hex, and 10,000 other tokens.

            I agree that Bitcoin sucks as a medium of exchange. It was good in the beginning when there was a niche user base not performing many transactions, but I do think those layer 2 adoptions such as the lightning network are taking off [link]. My other Bitcoin article [link] should show that I am no Bitcoin Maxi and I think that platforms like ETH, DOT, ADA, etc. is where the future potential is at.

            Discouraging selling isn’t necessary a bad thing if its for a purpose other than artificially driving up a price. Why? Because the price isn’t real in that case. True price discovery happens from a lot of volume of buying AND selling. Every other cryptocurrency of Hex’s size has 50-100x as much volume. If a whale comes in and drops a few million on the bid for one of those cryptos, the impact to price will be minimal. That’s not the case with Hex. It’s gone up 10,000x since inception, or whatever the latest figure is, which means that there are a lot of people ticking down the clock to the end of their stake with their $10,000,000 account balances. When a few large accounts decide to cash out at once then everyone else will find out the quoted price was all smoke and mirrors.

            Few people in the beginning could have expected that Bitcoin would go up 65,000x, so yes, everyone would have benefitted to be locked in for years, but hindsight is always 20-20. That doesn’t mean that Hex will have the same trajectory. Hex is already huge and has a market-cap of $136 billion. How much more juice can really be squeezed out at this point? If it goes up another 9x, it’s neck and neck with Bitcoin. If it goes up another 8x after that, its value is worth all the gold in the world.

            Founders of successful companies generally don’t get rich from putting into contracts that they get half of everything like Hex does. They get rich from serving others and producing value for others. Amazon makes it easy for me to go into my living room and buy cheap Chinese junk without going to a store. Apple invented the smart phone. Tesla made EVs popular.

            Hex is DeFi alchemy.

          5. One of the reasons why I mention liquidity and volume quite a few times is because it is easier to manipulate the prices of tokens with less of it. As an exemplary example that takes this to the limits, see this Reddit post on creating a fake coin with a million dollar valuation out of nothing [link].

          6. Yes but stakers are virtually lending value to unstakers by reducing supply and sell pressure and holding up price

          7. unstakers can’t pull that value out of the Hex system without selling the token, so where is the lending?

  4. Robbing peter to pay Pauls par for course isnt it? Ask TCV pump fallout members in the telegram groups, there all pickpocketing each other because there the same investors. Dero piratechain monero etc

  5. I wholeheartedly disagree with the assertion that Hex is a scam. All I hodl is hex and I’m up more than any other crypto. Coins getting hacked, rug pulled and scammed all around me, yet hex is still here and going up. Don’t be salty because you didn’t buy. All of the haters have been crying and you sound like you’re on your way to the pity party.

    1. Bitcoin is still here. Ethereum is still here. Cardano is still here. Hell even Bitconnect is still here. Again, just because something still exists or hasn’t gone to zero doesn’t legitimize it. Crypto has a tendency to stick around for a long time and since Hex is a smart contract on Ethereum, I am not sure if there is even a mechanism for it to ever stop as long as Ethereum exists.

      The only argument that Hex shillers seem to have is “I’m up X% since I bought, therefore it’s not a scam.” Being an early investor and making money from it doesn’t make it legitimate any more than it does for early investors in Ponzi or pyramid schemes. Early Bernie Madoff investors made millions as well. Although eventually much of their earnings were clawed back.

      1. ETH, ADA and BTC are not scams. However, there is nothing about I think you see that’s not the only argument. But there’s nothing to claw back here because the smart contract is paying the users.

        Also, you make so many assertions that are inaccurate in this article:
        “The distribution of Hex shows that it is highly centralized. This shouldn’t be a surprise given how easy it is for Richard Schueler to mint himself tokens through the origin address.”
        – the OA cannot mint any new coins. That was a transparent part of HEX from the outset. It helps HEX from being classified as a security under the howey test. I’ve had an independent law firm look into this. If you think that the only argument HEXicans have is number go up, then you’re not engaging in discourse with the right ones.

        1. I was just pointing out that existence is not criteria for proving something isn’t a scam. Bitconnect was exposed, people were arrested, but yet its coin is still trading.
          By design, “donating” Ethereum to the origin address is all it took to mint new Hex tokens. Therefore, creating a script and running ETH around and around in a loop for months could mint him as much Hex as he wanted. I’m not sure why you are saying that is inaccurate.

          1. Are you aware of how Genesis ETH was distributed? People had to “donate” Bitcoin during a sacrifice period to get ETH. It’s a normal procedure in crypto.

          2. Yeah it was basically the original ICO, but they also had an disclosure offering detailing its risks [link]. I would say the word ‘purchase’ is more appropriate instead of the word ‘donate’ since the word donation has connotations to charity.

    2. Bernie Madoff was chairman of NASDAQ. Talk about legit, right? His ponzi scam lasted for 20 years and lots of people got rich. Lots more lost their livelihoods. Success rate doesn’t determine validity of a scam. Structure does. I’m not saying HEX is legit or a scam, but you can’t associate earnings with legitimacy. The main thing I find concerning about HEX is that RH is from Florida. Never trust anyone from Florida.

  6. It’s interesting that you’ve Interpreted the brilliant design as a negative. What is wrong with it being designed for price appreciation and being honest about that and the mad gains in hex’s promotion. You do realise many of the design parameters are modelled directly from what works already in the real world of cds and that yes founders do get rich? Why was it ok for Satoshi to premine 1 million btc

    1. Because the main feature of the token should have some utility or purpose other than just penalizing selling for its own sake. If Hex actually did something behind the scenes like Celsius and Nexo do like creating crypto loans then I would have a different view of it.
      Price discovery occurs through large volume in both buying and selling. The volume in Hex is abysmal compared to its market cap, so the price you see and the gains showing in your account are an illusion. All it takes is a few large holders to sell and overrun the volume and it will drive the price down much more. The last couple of days has been a good example of that with Hex being driven down 25% on light volume (relative to tokens of its size).

      I have no problem when founders get rich for innovating something useful, but core to the design of Hex is to enrich Heart. Heart’s certificate of deposit idea wasn’t even first, just better marketed [link]. BTC was untested, unestablished, and was worthless at the time but even today his million BTC just sits there. Maybe money and fame didn’t drive Satoshi, but it is obvious it drives Heart. Satoshi changed the world and spawned an entire new industry with DeFi.

      1. You keep ignoring that it’s paying interest to the staker class. And the interest rate is far higher than the APY you can get on Celsius or Nexo.

        The market cap is a fictitious notion, it’s just the latest price multiplied by the circulating supply. It is not a meaningful concept, and it doesn’t relate to volume. The volume isn’t abysmal, it’s just early stage. There are less than 70,000 stakers. Why would you hold low volume against it? The price has dropped 29% with whales taking out $11.1 MM in the last 7 days. Is that a shocker? There’s only $30M in the liquidity pair between HEX and USDC. When there are 10x more users, do you think you’ll be able to be making the same argument?

        Besides, taking the last few days out of context is just silly cherry picking. Look at its performance since inception. Do you know how many times people have dumped the price and created dips like this? HEX has dipped several times in excess of 70%. Thats the whole point of staking, to get people to realize the bigger picture, and not lose out to their human psychology because each time they would have wanted to sell, their stakes kept them from doing so. Because each time previously, it’s gone on to make new all time highs. The reason that happens is because of product market fit and people and the long term demand continues to outstrip short term sell pressure.

        Another reason its cherry picking, is to merely point out this is hardly unique to HEX: Lots of cryptos have had significant dips in recent history and have continued to recover. SOL dipped 37%, Cardano dipped 54%, that doesn’t mean they are projects without merit.

        It’s a highly innovative and speculative space. Price discovery is far more dramatic than traditional markets.

        Richard Heart has worked hard to build products that improve the space and keep users safe. You took a swipe at the fact that “audits” don’t mean what people think they mean, but those audits were done to ensure the product is safe from getting hacked. And he paid good money to have it security audited twice and audited once to prove you couldn’t game the tokenomics. Do you know how many defi projects have gotten hacked and lost their users their money, or have been exploited for poorly conceived game theory? And you’re giving him guff over that. Dude, PwC doesn’t have any employees who are remotely equipped to do what CoinFabrik and the other auditors did. And what’s more important exactly? Keeping users’s funds safe and making sure the product works as designed or having PwC write some fictitious audit of the project?

        Seriously, so much misdirected hate.

        1. I know I’m going hard on you and your analysis, but all ribbing aside, I do appreciate the fact that you aren’t censoring our dialogue which certainly is in your power to do so.

          It’s your website and none of my comments have to be published. So good for you man. Seriously.

          1. Thanks, I appreciate that. And I do think that a two-sided conversation is more useful to all readers as it adds depth and clarification to various discussion points. I think the comments section is now loner than the main article though. ha!

        2. I’ve made it clear that the stakers only get paid. But the APY is far higher because its cutting up the sandwich into smaller pieces and only giving those pieces to the stakers. Peter is still getting robbed to pay Paul. The inflation serves no purpose other than to pay stakers. I feel like we need a different word here because its not PoS staking where people are voting on datacenters.

          Market cap is important because its of the value locked in and the potential for selling. Again, price discovery comes through volume. Unusual Whales on Twitter tracks whale wallets and lately there have been some huge dormant accounts that transferred Bitcoin to exchanges, presumably for selling. The market didn’t even feel a blip.

          Being down 30% over the last week on light volume relative to its size was just convenient timing, only because Bitcoin and Ethereum are nearing record highs. Sure, plenty of other cryptos go down a lot too on high volume, but usually with high correlation among them all. I’m not saying that Hex being down while BTC and ETH are up is particularly relevant, as the opposite scenario has played out in May, but a light volume to market cap ratio is always going to be a bigger threat to the token with lighter relative volume (that’s also true on the upside as we have seen with Hex, but then it becomes the battle of FoMo versus Lambo).

          Auditing a smart contract doesn’t mean what auditing means to a layperson, and advertising that it has been audited 3x is part of his marketing campaign. As I mentioned, I pointed that out because of all the traditional marketing on buses, taxis and magazines that is targeting people who might not even know what a smart contract is or even know what cryptocurrency really is. And while being audited 3x will mitigate contract bugs, it still doesn’t remove the fact the contract protocols strongly benefit his interests and gives him a massive controlling supply.

          1. This is an excellent debate between Jordan Ledvina and Ryan. Very professional and respectful. Two guys who obviously know what they’re talking about in Finance and Crypto. Really getting into the nitty gritty of wether HEX is a scam or not. I can’t make up my mind, you both make great points…

          2. So a couple of important comments to bear in mind.

            Re: Audits, I have to strenuously disagree with your perspective here. The layperson doesn’t know anything about crypto- I totally agree with that premise. But what is exactly the problem with advertising the audits, even if these people have a misconception of what it is. Being under a misconception is only a problem when the reality is worse than the perception. In this case, thinking PwC audited this product would arguably be far worse and far less meaningful (unless they have already moved into this market segment and hired up all the best cyber sec talent). In our case two reputable security audit firms audited the code and one of them did an additional audit of the economics of the coin to mathematically prove the game theory/core value proposition that staking pays longer. This is exactly what the layman should want to see if he took the time to educate himself. So the truth is actually more optimal than what people are thinking and there’s limited space in a billboard to communicate information. So I’m not understanding what the problem is.

            The fact that the OA receives half of all Emergency End stakes is well known and readily available information. It was disclosed from the outset and no effort was made to obsfucate that. The only material question is what is in it for the user who acquires and stakes HEX as intended, and the answer thus far has been outstanding results. That OA never stakes and that has ensured outsized returns to the staker class.

            re: Market Cap; I again want to point out that Market Cap is not a relevant concept. This is a point Richard Heart has made repeatedly in his many videos, it is just price times supply. I could invent a coin tomorrow, create two trillion supply and sell my friend 1 coin for $1, and I have literally surpassed the market cap of bitcoin in a single transaction. The market cap can’t be sold or traded. The idea that volume to Market Cap matters is based on a premise that they should somehow be related. And they are not. As of time of writing, USDT has a market cap of 70B and a 24-hr volume of 68B. Does that make an ounce of sense? A low liquidity market is the sign of one thing only: opportunity. Bitcoin was best bought when it had the lowest liquidity, and the same is true with HEX. When HEX hits 1M users, there will likely be more liquidity but there will also be less opportunity. (Also Mt gox coins are coming loose in a few months… it will be an interesting test case of your hypothesis if bitcoin is truly as liquid as you suggest).

            re: PoS, I think you’re right. Proof of Stake here does not mean the same thing as it does in Cardano. You’re not voting on validators, it’s just a mechanism to determine payouts to the stakers. Transactions are of course executed on Eth which is still PoW. I think that probably is a disservices the discussion in the long run, but I feel like this is a point of nuance that doesn’t have a large baring on most people’s evaluation of HEX.

            re: Celsius and NEXO, I’ve seen you point to these products as examples of innovation in some of your responses to me and to others and I’m a little surprised because you also seem to hold the innovation of Bitcoin in high esteem. To my mind one of the biggest parts of Satoshi’s innovation in bitcoin was the trustless aspect. It removed counter-party risk. With Celsius and NEXO, we’re literally re-introducing counter-parties to make less APY. Lending platforms in crypto are certainly not novel, it’s just the last time when Cred did it they went bankrupt and users lost their money. With HEX you earn interest without a pool, and without counter-party risk, and you earn more APY doing it. To me the value proposition is superior, the game theory is superior. The only way they are the same is that Alex Machinsky and the OA could both do a rug pull, which I think is highly unlikely in both circumstances.

            It was unlikely for RH before because it would literally crash HEX and the vast majority of his net worth and it would also kill the prospects of Pulsechain and his upcoming fork of pancake swap, and his exchange etc. Squashing his users would be incredibly short-sighted and so I think HEX just offers a superior opportunity, and I don’t care if RH gets rich as well in the process as he is the founder.

            Anyway, this has been fun and edifying. As you pointed out, this is getting longer than the article itself at this point, so I’ll bow out and you can have the last word! cheers guy,

          3. 1. “The idea that volume to Market Cap matters is based on a premise that they should somehow be related.”
            2. “I could invent a coin tomorrow, create two trillion supply and sell my friend 1 coin for $1, and I have literally surpassed the market cap of bitcoin in a single transaction.”
            Thus, you have just demonstrated that low volume relative to the size of the market is a problem. Try to sell a few hundred of it and there will be nobody to buy.

            “USDT has a market cap of 70B and a 24-hr volume of 68B. Does that make an ounce of sense?”
            Yes, since USDT is offered as a pair for pretty much every crypto and it is used as an intermediary for a place to park crypto sales before buying another one if two cryptos don’t have a direct pair.

            While you are right that there was less volume to marketcap in the very beginning of Bitcoin, I think it was more of a reflection of the infancy of cryptocurrency in general. It was very niche to computer engineers or people using the dark web, few people had heard of it, and you could acquire it without trading through mining or P2P wallet transfers. At least since 2016 [link], the ratio has been 0.02 or greater which is about where it is today. The exact ratio is not itself important, it is just a reference range for comparison to other established cryptos. Some have more, some have less, but Hex has 1/50th for cryptos of its size.

            Don’t get me wrong on Celsius and NEXO, I agree they have their own problems with centralization, custody and rehypothetication. The interest rate of 8% reflects that higher risk, and frankly should probably be higher. I’m just pointing out that their returns come from people taking out loans, so its return is interest in the traditional sense and isn’t just reallocating money around in a game of musical chairs. You don’t have to buy a Celsius or Nexo token to earn those returns or take out a loan. The Anchor protocol [link] has created a decentralized loan platform, which is an interesting up and coming idea.

            I appreciate the respectful discourse you brought and we’ll have to agree to disagree on many points, but I do hope other readers have also found utility in this back and forth.

  7. This the most comprehensive criticism of HEX I’ve ever read. I don’t necessarily agree with all of it, but well done.

    1. I’d like to echo the above comments that the article and subsequent exchanges have been phenomenal! Thank you, I’m learning a ton and also realizing I have no “real” idea what I’m doing with my bag of crypto lol!! Thank you!

  8. Hey Ryan, first off just want to say a huge thanks, for all the effort you have put into this article I can clearly see that you are genuinely providing value to the crypto community.

    I was wondering if I could address the Peter getting robbed to pay Paul analogy.
    Please take what I say with a grain of salt, I am not trying to prove anything I just want to understand to the best of my ability.

    In my mind it is true that Peter (liquid HEX owners) is paying Paul (staked Hex owners)
    in the form of inflation.

    However I choose the word paying intentionally. If I were to borrow money from a friend and pay interest to them. Is there any new value created? the net worth between the two of us will still remain constant. Money changes hands in the form of interest, but no new value has suddenly appeared.

    However I can use the money lent to me for potentially productive purposes, that perhaps my friend would not have done. In this case new value has genuinely been created. e.g I use the money to open a bakery.

    Now let me try to bring this analogy into the HEX system (and please let me know if I’m employing any logical fallacies here).

    My friend would be the HEX stakers, I would be liquid HEX owners. The loan, would be price increase created by my friend “locking up his HEX”

    Just to clarify in this situation the lone is NOT the HEX owned by liquid holders, but it is the increase in the value of said HEX.

    In this situation liquid HEX holders will of course pay interest for said loan. They have the utility of the increased value of HEX. This value can then be used for economically productive purposes. (It would be like taking out a loan to open a bakery).

    Thanks for your help and time in this matter
    Kind regards

    1. The loan analogy is a little hard to follow. In this analogy, what are liquid Hex holders getting in exchange for the interest they pay? It sounds like from your last two paragraphs that they get increased value of the Hex price. What if the price of Hex stays constant or goes down? Outside influences determine the price and there is no guarantee that the token price will climb. And aren’t locked account balances also getting that value even though they can’t immediate use it?
      But say it does increase, how is the increased price of Hex (‘loan’) paid back? There is no reversal of the transfer, both locked and unlocked balances would increase with a Hex price increase, just that locked balances would increase faster since value is permanently being shifted from the liquid holders.

    2. I see you asked the same question on Reddit in the HexCrypto forum. You really aren’t asking the right crowd since anyone who talks negatively about Hex there is banned. I suggest you ask your question on an economics, finance or investing subreddit. Hex shillers all bring up the same marketing points because they don’t have a grasp on basic economics.

      “You are the bank.” -No, you aren’t. You still aren’t loaning money or earning fees on financial products.
      “Banks don’t lend money anymore” Umm, actually they do. In another link I posted the data showing that the average bank lend is 70% of deposits.
      “There’s no 3rd party middle men.” -Middle men are not the reason why you aren’t earning 40% with a bank. The maximum loan interest rate tops out at 18% but the average rate is much less.

      With Hex you get more Hex, that’s it. Anyone can replicate Hex and change the contract to pay 50%, 60% or 70%+ by tinkering with the inflation rate. It’s completely arbitrary and that fact alone should make more people understand the fraud that it is. You could have 1,000 Hex clones all doing the same thing, all inflating their nifty tokens, but everything would all come down to their prices. And that is the key why there has been such an aggressive marketing campaign and a brigade of Hex shillers pumping it everywhere. With 40% more Hex tokens a year and a 2,000x price gain, that is a whole lot of extra money that needs to be attracted into the system to keep it from collapsing when early investors cash out.

      1. Top loan interest rate on a CC is upwards of 39%. Payday loans 500%+. Banks Loan inflation (money borrowed from the fed based on their liabilities side of the ledger).at super low rates. When Hexicans say they are the bank they mean by burning/staking their coins it reduces supply. That increases value of liquid Hex, in a way lending the value they have now to liquid holders for a set time. For that they get paid inflation in Hex. (3.69% Not arbitrary per se. Look up Nikolai Tesla 369)

        1. Ahh, interesting. I haven’t seen any of the Hex material that directly addresses why 3.69%, but maybe I missed it. It was, however, arbitrarily chosen by Heart to be the inflation rate though.
          “Banks Loan inflation” you misconstrue the definition of a loan and inflation. One is paid back, the other is not.

  9. RH stated many times there is no marketing department, no marketing budget, no marketing effort.
    Not RH nor “the HEX team” have ever paid for marketing or ads. Correct me if I’m wrong.
    All the ads you showed or mentioned are paid for by proud & grateful Hexicans who become rich investing in HEX.
    That’s a true grass-roots movement.

    Not a single argument in the article that does not apply to BTC, ETH or the Dollar!
    Are these scams too in your mind?
    How do you solve the created intellectual paradox of calling HEX a scam and then literally saying in the article it’s neither a pyramid scheme or a Ponzi?

    To close, I think you already completely disqualified yourself by creating biased and manipulative framing in the title and picture (shady-hooded-computer-nerd).

    Enjoy staying poor.
    HEX & PULSE will be the best performing assets ever created.
    One thing you said about HEX is true though – It’s BRILLIANT! YES, it is!

    1. And you believe him? Have to ask who has the most to gain from mass adoption of Hex: the guy who owns 80%+. I can see why you bought into Hex if you are willing to take everything he says as blind faith. That marketing cost millions of dollars and all had the same ad, so who was this mystery marketing benefactor?

      “Not a single argument in the article that does not apply to BTC, ETH or the Dollar!”
      In fact, basically every argument in the article doesn’t apply to BTC, ETH or the Dollar and where it does I have pointed out the distinction.

      “How do you solve the created intellectual paradox of calling HEX a scam and then literally saying in the article it’s neither a pyramid scheme or a Ponzi?”
      Because there are more than just 2 types of scams in the world. Just because Hex doesn’t legally qualify for those two, it doesn’t means it’s suddenly legit.

      There’s a certain creative element to publishing and the stock photo was a great fit for a scam. There is no uncertainty of my position from the title.

      The phrase “enjoy staying poor” is a common retort in the crypto world, but trying to use it on someone who owns an Aston Martin [link] is just comical. Good luck with your get rich quick scheme.

      1. You have heard of Baron’s. There will be Baron’s in Crypto. 100 years form now the richest families in the world will be Crypto Baron’s. You can work on building the railroad if you like as for me, I would much rather own it.

  10. When banks lend money, only a tiny fraction of it is investor money. The banks simply write the loan amount in their “books”, thus creating the money whose interest they then earn. This is a real scam and is part of the basic knowledge of the business model of banks. That you describe this completely wrongly in your article exposes your propaganda before it even begins.

    1. 70% of it is not a tiny fraction [link]. It is lower than it has been in decades because of central bank (government) financial engineering flushing the world economy with cash. I don’t know what bank you place your money with but I wouldn’t want to invest in one creating their own money either. You might want to rethink that basic knowledge of the business model of banks.

      1. Whole point of crypto. No central controlling entity. Our fake money is better than their fake money. Predetermined supply, total supply. inflation. Open market determines the value.

          1. He does. That was my original hold up with Hex. Why would RH or OA need so much of the supply? He’s already wealthy but to much money there is no such thing right?. Maybe he wants to be the richest person ever IDK? Most super wealthy are just super rich on paper. Never can they realize those gains. Just to spend a Billion Dollars it would take you 25 years if you spent 100,000 every day. So once you get to 1 billion all the billions after that are kind of pointless. One thing I know for sure is that with such a overwhelming supply out of the reach of the financial cartels, they can’t with 100 certainty corner the market and manipulate the price. Richard Heart has made it so that almost every other crypto out there is a better prospect for manipulation than HEX. Yeah were taking a leap a fait there. # China Bans Bitcoin

  11. The tokens arnt locked they are burned and replaced with shares. 🙂

    And since the oa holds 80% there can never be 100% staked to make the apy to go to 3.69. There’s only 20% available to stake making the available hex that can get the inflation scarce and more valuable. These are just some points you left out.

    1. Yes, replacing Hex with Tshares, but it’s basically just semantics replacing one token for another and then reversing that replacement when stakes end. Introducing Tshares doesn’t really change anything so didn’t feel it necessary to mention.

      It depends on how much of his bag he stakes but yes it looks like it will be unlikely that ever Hex would be 100% staked since he runs a large portion of the liquidity pools on Uniswap. I’ll update that section to address this but all the tokens that Richard has were copied from other Hex buyers, so its kind of like he is just giving people back their own money, lol.

      1. T shares are one of the most important parts. When I burn my tokens I give my value to liquid Hex holders. My Tshares are what pay me inflation. The Tshare price changes always becoming more expensive in terms of number of Hex to obtain one. This stops people form being able to stake then turning around and end staking and buying more Tshares than they previously had.

  12. Thank you so much for this article!
    I Know it’s a whole different topic, but I’m wondering what your opining on defi automated market staking pools such as pancake giving up to 70% APY. Do you feel it’s legit and will sustain itself of a while at least?

    1. It really depends on the pair, but I think the golden rule of the higher the APY the higher the risk. The risk in any DEX of course is the “impermanent loss” (the oddly coined term really means unrealized loss). I’ve never used Pancake swap so I don’t know what their protocol offers, but I assume it is like Uniswap (maybe even just a clone of Uniswap V2 but for the BNB chain). Uniswap v3 allows you to target only select areas of the relationship between the crypto pairs which limits the impermanent losses since you aren’t providing liquidity all the way to zero if one token in the pair fails. People who were providing liquidity to IRON FINANCE back in June between their stable-coin and the collateral pretty much lost it all as both sides headed towards zero. If pancake swap is like V2, then have that point in the back of your mind.
      Moreover, as DEXs have become more popular, the yields on liquidity pools have dropped like a rock. Your mileage will vary but I think you won’t get 70% APY for any extended period of time. It’ll probably be a win-some, lose-some situation in the LPs you choose so that if you diversify your LPs you’ll get somewhat of a decent return. I wouldn’t really recommend buying a token just to liquidity farm but lots of people do it. If you target the highest yields though, you are probably just providing liquidity to tokens that are going to lead to a large impermanent loss. Hope that helps frame your decision.

      1. “IF you target highest yields, you are probably just providing…” that’s been me trying figure out farming. This is a great article.

  13. Thank you so much for this article. I was pouring over articles and YouTube videos before I found this one trying to figure out why I couldn’t get that “too good to be true” feeling out of my stomach. This research would have taken me days and you laid it out very efficiently and easy to read.

    The biggest issue I’ve seen over the “scam” argument is that both sides can be right at the same time. For example, it can be true that HEX provides no real solution or service and is built by a self-proclaimed “scammer” with the intention of enriching himself. It can also be true that people have made massive gains with HEX and that there is opportunity for gains in the future which of course is not an element of traditional scams. Given that you aren’t required to stake HEX, you can take the bet that the price of the token itself will increase over time and exit when you want to without the risk of the staking penalties.

    I will give them credit for marketing though. The amount of people this RH guy has convinced he is some sort of fighter for the every day citizen is mind boggling but I guess we have seen it before many times through history. To your point from the beginning of this article, I don’t know how you can look at this guy’s past and all of a sudden believe he’s trying to take on the entire US banking system with your best interests at heart. Also touting massive gains on such little volume and claiming market cap is not important? The whole thing smells.

    1. Absolutely the initial investors have made big gains, they got in early before the FOMO marketing blitz and YouTube shill videos advertising it everywhere. Right now, all those early investors are trampling over each other to cash out before their $100 to $200,000 investment goes back to $100.

      Most scams are sold on the future opportunity, like how a few months ago Richard Heart referred to its $0.26 price and how that somehow makes it ‘pre-viral’ without mentioning it already had a $160B market cap. In this crypto world everyone had heard about how $100 invested in Bitcoin in the beginning has turned into $6,500,000 and Heart is using that same FOMO and greed tactic to get people to buy, especially with all the subterfuge of it being an investment earning these big returns. It could still go back up, especially if he amps up the marketing campaign to rope in new buyers.

      Beanie Babies were worth a lot of money back in 1999 but people weren’t kidding themselves that they had some legitimate investment. Everyone knows that Dog-meme coins have no real utility. The subterfuge of the Hex product and community is what is most bothering. I wouldn’t have even written an article about it if it wasn’t pretending to be a “certificate of deposit” or investment.

      1. Its new money new instrument. It doesn’t have a definition. A COD is just the closest thing to explaining it. You don’t make interest on stakes you make inflation from a sub-staking mechanism called Proof of Wait. You have to user terms that people understand even though they are not correct, because the definitions haven’t been made yet. New inventions have to use like terms to convey understanding, even if they are a bit misleading. How do you define a wheel before the invention of the wheel?

        1. I have to give it to Heart, he is very crafty with language. Proof of stake, proof of work, proof of authority, proof of history all mean that the blockchain has been proved to be true through some kind of agreed upon work. What is actually being proved with “proof of wait?”

          1. I think what you actually mean to say is what I being secured. The Proof of “x ” is what does the securing of a project. Proof of wait is more of a sub-proof it secures the price.
            For proof of anything I think we need to broaden our ideas of what work is.

    2. Watch his older videos. That will give you an idea of what type of person he is. PRE CRYPTO.
      HIs first crypto idea was to use wasted hash power to solve fluid dynamics equations. Early on he came to the realization that great projects with great tec. weren’t going anywhere. The cryptoverse wasn’t mature enough for that yet. What was successful was speculation coins. He realized that price was the only thing that mattered so he created a coin that would hold its price as well as it possibly could and he did his best to not create a security. Price that’s all anyone cares about.

      1. In this low rate environment our country has been in for ten years, it has really skewed perceptions of investment. Traditional investors in bonds, dividend stocks and real estate also liked getting cashflow from their investments.

  14. Hi Ryan. Just wanted to say this is a very thorough article. Nice work.

    I’m an early “investor” in hex. I was there on day 1, converting my ETH into HEX, even using my own ETH address as a referral to get the extra tokens on top. About 50% of my stack has been cashed out thus far. Needless to say, I made a lot of money. I’m only saying this to make it clear that I’m not “salty” for not getting in early.

    I also blindly trusted everything Richard said. The crucial turning point for me was when I saw irrefutable proof with my own eyes (on the blockchain) that the origin address was indeed recycling ETH that it received from early adopters to dilute their share of newly minted hex. I don’t think Richard planned to do this initially, but at one point the price of hex was so low that people started joking the value of it needs to be denominated in “litetoshis” instead of “satoshis”. My theory is that Richard panicked and started buying the hex himself to prop up the price. If he used his own money to do so, that’s fine by me, but to recycle the ETH from early adopters over and over to dilute them and keep it a secret was a step too far for me.

    I watched many of his streams hoping this “recycling” would be addressed and somehow explained, but it never has. Bans were handed out swiftly.

    If you plan to put money into hex, please do so with your eyes wide open.

    1. How else could you add liquidity to a project with out using project funds. IE not creating a Security
      1.Your sir entered adoption amplifier with eth
      2.RH or someone was paid that eth. that is their money now they pay income tax on it.
      3.they enter the adoption amplifier just like everyone else does (with the eth they earned) which you gave them
      4.They use the Hex they bought with their own money and the rest of the eth they earned ( from you ) and provide liquidity.
      5 Voila! Private Liauidity.
      6 Never was rugged. Should have stayed in.

      1. Why the aversion to creating an actual security if its this great financial product? Because it wouldn’t actually be approved by the SEC?
        I don’t think Heart will ever rug pull Hex. He’s too smart for that, but he WILL dump Hex onto the masses over time if he is successful in getting wider adoption through the marketing and shilling efforts.

        1. What’s wrong with Government mandated religion. Its a new space created to nullify the greed of governments, (Bitcoin) If we let government back in they’ll just bend us over again. Im not anti-Gov I just think a lot less of it would be nice. I cant as a non registered investor participate in an ico ido or ipo because why? my safety? but I can go to the gas station and spend my life savings on lottery tickets with zero chance for gain. Meanwhile Credited Investors can get in early and when the open trading begins and the price 100x in 5 hours dump all those allocations on the NC-investors for mad gains. Rich keep getting richer and the laws stop the poor from catching up.

  15. A very well written article. Exactly confirms my suspicions. As a software engineer, I love how you reviewed the actual code. I hope many Hexicans will read this and finally get to understand their great ‘product’.

  16. Great article, there’s also a Reddit post about one address was sending 100, 101 Hex to 173,000 different addresses approx year ago. They can’t sell cuz the gas fee will cost more than what the hex is worth so most of them are sitting dormant. I think their goal is to manipulate people to make it look like there’s more wallet holder than there actually is so they can market and convince people that they’re growing rapidly and have a lot of holders.

      1. Riiiiight, an “airdrop” on dummy accounts without any other holdings. lol, that point flew right over his head, didn’t it?

  17. Welcome to the “World-of-Hex-craft” Game Review

    Game World : “Hexico” (although there is no graphics) except for the 1980’s website design.
    In-game characters: “Hexicans”
    In-game currency: “hex”
    Objective: To prop up t-shares.
    Bottom-Line-Strategy: Shill and get new players to join be taking pictures of the things you bought selling your in-game currency.
    Penalties: Leave the game early (before the event ends) and you pay the game a fee (to the AO and the rest of the players).
    Game tags: meme token with interesting tokenomics, Meta without the verse , Casino(since house OA will win).
    Similar games: “Mining pools” just like virtual staking but virtual mining.
    You’ll be stuck in an endless commitment to keep withdrawing carefully planned withdraws as to not hose the in-game currency so the new players don’t leave too early, we need them!

    This game is commonly confused with the following:
    – pyramid scheme
    – Wannabe financial product/vessel (if the SEC looks at it, then it’s not).
    – “Can’t put a finger on it, but something is a bit fishy.”
    -That meat loaf you ate the other day that didn’t quite sit well in your stomach.
    – A fruit cake; Looks legit, but secretly nobody likes it.

    Overall review: It’s a bit of a boring game, crappy graphics and new users are far in-between and the content is pretty dated.
    Not many users in the telegram group (~38k) to interact with.

  18. Hex is awesome. Pls let’s all go back within a year and review our thoughts and see if the criticism stands. Ppl Will continue tô make money and that’s all that matters in crypto.

  19. So… for starters, you come of very much a PoW maximalist and dismissive of proof of stake. That is always going to create a backlash… because its… incorrect. I agree when you do nothing you contribute in no way, but Proof of work vs Proof of Stake is not doing nothing vs doing something – both secure the networks from a “something” point of view. So IF you are a PoW maximalist, and I do get the impression you are despite having read all your comments and the post, I strongly disagree ( I could well be wrong and admit that ).

    Second to that… as you stated in the article and as was predictably done by the community… whenever you tell someone they are in a scam, they will defend it to its death. True in crypto, true of ponzis, true of pyramids, true of MLM (which is not a pyramid by definition). So it was no surprise that you had backlash from deniers.

    Third, I will say what you will not, this IS a ponzi scam. What they are attempting to do by making these definitions and claims is HIDE that fact. A scam that did it MUCH better and was not related to cryptocurrency was zeek rewards. They actually sent people physical products when they joined the scam. When the US SEC shut them down they were worth of $650 million. They used the argument “sales were taking place so it can’t be a ponzi”. The courts disagreed. They said… no there was limited sale of product and almost exclusively the sale of products was by members of the scam, but not enough to justify the payouts they were making. Meaning they were making more money from people investing in the scam than any sale products taking place and thus payouts were from the funds of new members coming in. I suspect similar here… the only people buying the tokens, are people that are joining the scam – and as such its a ponzi with 0 usage outside of it being an investment.

    You comparison to a stock split was pure generous. In fact most of your post was aside from what I stated above. Thank you for this. Much respect.

    1. I think it stems from the performing work comment above, but I don’t mean that in a pure PoW state since PoS is performing work as well. For the record I am NOT a PoW maximalist, quite the opposite.

      I think the PoW idea was a good idea in the beginning when the reality was a couple of thousand individuals running mining software on their home computers leading to strong decentralization. When mining farms emerged, PoW became very centralized, so I think that PoS is a valuable evolution of keeping that centralization in check. Plus it’s nice that stakers get to share in the profits without having to burn their own electricity.

      Good info on the zeek rewards. Here’s a [link] if anyone is interested in reading the case. Ponzi schemes and scams are always evolving.

  20. Judging by the comments on this page, humanity is in peril. The hex token is such an obvious scam and I cannot believe that there will be anyone defending it. I understand being greedy and wanting to make money before the bubble bursts, but to genuinely believe it isn’t a scam is astounding. These are the people who will inherit the earth when the boomers die out…

    Anyway, have you looked at OlympusDAO or Wonderland Time? They operate similarly to HEX token, but at least they provide up to 80000% compound interest annually. If you want to scam someone, it seems that it can be worth it to go big. I have a stake in them and I’m hoping to make money before it all falls apart…wish me luck lol.

  21. On etherscan if you go to hex the address 0x74de5d4fcbf63e00296fd95d33236b9794016631 It’s Been trading hex in every couple minutes. I click the on one of the hashtags this address has over 100k transaction in nothing but hex trading. Is this Bot? If anybody have time please investigate that address.

    1. I didnt see any Hex transactions but I didnt go through many. there were a lot of different coins being traded. My guess is that this is an automated account.

  22. Truth of the matter is, this author nor anyone else have any idea as to the outcome of success of any project. I for the life of me cannot fathom why anyone would want a Dog coin or a governance token, but would I write and article or waste my time convincing people not to buy one? NO!!! It would be futile. The only thing I would have to gain by doing so is that perhaps their funds would flow into the liquidity of the projects that I hold interest in. I’ve seen many articles like this, most of which had the facts as they pertain to Hex completely wrong. I will give it to this author he has covered most if not all of the Hex haters talking points, and by ever so slightly skewing the actual facts or mildly imparting his own assumptions, his article almost seems like one of an objective critic calling out Hex for being a scam that is meant to hoodwink its investors into loosing all their monies. I would not be surprised if this was PAID FOR FUD, sponsored by those fearful that Bitcoin might loose market share to a product that is much superior. It’s actually the sheer number of SHILLED hate articles that strengthen my resolve in the Hex project. I have to ask myself.” why do people care so much about me getting scammed by Hex”. Why not just write an article about a project that is so good that it would make me want to invest in that project and forget all about Hex. Perhaps because one doesn’t exist? If I wanted to protect Bitcoin it would be easier for me to write articles defacing projects that challenged Bitcoins dominance, then to write articles as to why Bitcoin is still better then said project. Its easier to put out an ember then a flame. The naive and the smart people will prosper and the midwits will miss out. DYR.

    1. Let’s break this down here. So a Bitcoin holder, whose presumably already made multiples of his money from owning Bitcoin, is going to pick another cryptocurrency that isn’t even the slightest of threats to Bitcoin’s dominance, and pays a random blogger on the internet who has only a small platform to write a 5,000 word negative article about it? And then said author doesn’t even promote Bitcoin in the article, and has previously written about problems with it [link]? Why not pay that author to bash the #2 coin, Ethereum? Said author is not even a “crypto influencer,” and doesn’t have a Youtube or Twitter presence. Hmmm, I dunno but your argument seems pretttttttty flimsy, wouldn’t you agree? By your logic it is impossible for anyone to have negative opinions on Hex and it’s a cheap way to discount Hex’s flaws in your own mind.
      I know you Hexicans have a remarkable talent of looking at every single negative as a positive somehow, but you are free to comment where you feel the facts are “skewed.”
      It’s also easier to see where the motivation of Hex shillers is: their future gains depend on sucking in additional buyers. They need nearly $6 billion in new capital coming into the scheme every year just to keep the Hex price level. The ratio of Hex shilling to criticizing on major platforms like Youtube seems to be 100 to 1. I get more concerned about situations like that because the negatives are drowned out.
      This article was written for the investors who don’t want to be shilled to and seek out criticisms in things they put money in. Smart investors want to know where things can go wrong. Three months ago I had never heard of Hex or Richard Heart, and I started researching it as a prospective investment. It’s just that the more I dug, the more obvious of a scam it became and why I wrote this article.
      I agree it wouldn’t make sense to write an article on a dog coin. Everyone knows that meme coins are just that. That’s why I chose to write an article on a product purporting itself to be a “certificate of deposit” investment. If you look at other topics on this blog, I criticize a lot of alternative investments and point out their flaws. That’s the theme and why Hex was ripe for it, as a clever scheme.

      1. “Bitcoin might lose market share to a product that is much superior product”. Wow superior hex does 25 million in daily volume compare to billions for Bitcoin. Hexicans are crying now because Nomics.com drop their ranking from 3rd in market cap to 18th which they don’t belong on either ranking because their market cap are manipulated by low liquidity and supply by Richard. Even the top 100 coins does more volume than hex so you can see there is something wrong with hex.

  23. The entire crypto ecosystem, with of course a few exceptions, is essentially a closed universe of adult gamblers trading and “investing” in things that have no real globally scaled utility, currently. It only works bc it’s a closed system playing with participants in its own world of made up rules and assets. that’s where all the value is created-in the fact that it is in and of itself, a closed universe, much like real life with the Fed. That is the only reason it works.

    In real life everyone is subject to inflation by the FED through explicit raising of interest rates or other pseudo things such as treasury purchases, etc–all of which we have no control of but are subject to. The decision not to hold cash but rather to invest is an exercise in: 1. beating inflation, or at a minimum maintaining value w inflation and/or 2. generating alpha. The reason is largely both of these, bc even investors in low vol products such as gold (to temper negative effects of inflation) are also happy to generate a profit. Those who choose to engage in investment over holding cash are rewarded with asset appreciation for their risk, and capital preservation/protection for their inflationary deterrence at the expense of everyone else in the ecosystem who is holding cash and not taking said risk, but rather choosing to maintain full exposure to cash devaluation through economic inflation.

  24. The beautiful thing is that the crypto world is also a closed system like real life. And Hex is also it’s own closed system as well. It’s open in the sense that anyone can participate, but it’s closed in that it plays according to it’s own rules–it’s own “arbitrary” inflation rate, or it’s own number of total coins, etc, Go trade something else with it’s own made up rules and arbitrary inflation or deflation or whatever. It’s all made up, there is no Property, Plant, or Equipment. There is no real market cap, there is no real anything in crypto. There is no utility. Maybe it’s a bubble until the world catches up, maybe not. Who cares. It’s like poker, there is utility only to those engaged in that system, according to the stated rules, at that time. Which is why poker is not the economy. It, in and of itself, is nothing. In the instance of Hex, it is also a closed system in and of itself with participants choosing to hold unstaked Hex, like people choosing to hold cash in the real world. Unstaked Hex in the Hex world is a negative value proposition as is holding cash in the real world–both subjected to inflation which is paid to the invested, but of course not explicitly. In every closed system the returns aka rewards are always paired against the alternative–in this instance vs cash aka unstaked Hex. As long as people decide to engage in the Hex world, then those are the rules. Exactly similar in structure to normal inflation games played in “real” life on Earth. And it will continue to be such as long as people want to engage in that system, as it is with all things on Earth. There is no more of a scam than in traditional finance, in which things are the exact same–cash is the worst investment. Staked cash and it’s returns, ie investments, over any specified time period, in any closed system where inflation and a single alternative to inflation exist, is always the winner. Of course, not always, but that is the risk. Hold cash then lol

  25. Good post with lots of research I must say, but I have to disagree.

    1. Existing fiat is printed out of thin air and inflation right now is huge! Fiat in itself is a scam. Does that mean it’s ok for HEX to also be a scam? Maybe not, but whatever you want to call it, fiat is not an angel either. Richard Werner (check him out) has written papers on this for 20 years and it’s been admitted by the Bank of England. Loans are not lent out, but printed into thin air! Then when a loan is paid back the money is removed from circulation. HEX just does it all directly and out in the open, the fiat system hides it all and makes you all think its great! Existing dollars are being inflated hugely.

    2. Many assets don’t have utility, gold is the least useful metal yet the most valuable, paintings and antiques sitting in a house have no use yet cam be valuable. Bitcoin so far has had little use as peer to peer cash yet is the most valuable! Why? Supply and Demand, that’s all it is, HEX is similar. Why can’t HEX be a new peer to peer cash in the future? It’s possible. It’s just so early right now to tell, just like it was with Bitcoin.

    3. Market cap is a vanity metric. You can create a trillion coins, buy one for a dollar and you have trillion dollar market cap. HEX market cap isn’t really an issue, it has some meaning but market cap isn’t everything. It’s price action. People talk about volume and liquidity, but that’s only an issue if you want to cash out! If you believe in crypto rather than fiat you don’t need to cash out! That’s what everyone is missing. You don’t need to sell your BTC, ETH, HEX at all, because these are the new mediums of exchange! If all you think about is liquidity because you want to cash out then you shouldn’t be in crypto at all.

    1. For 1. Yes, the government money printing is out of control right now. Inflation was tame for 10 years but they really got excessive with the 33% of all dollars minted in the last year. It’s pure insanity.
      Yes I have seen the Richard Werner comments [link] and have read the Bank of England paper [link, see page 18, p4]. It is clear that RH or your average Hexican didn’t actually read the paper and just took out some quotes for their own interests about why Hex is ‘just like the banks.’ The BOE paper and Werner’s comments describes an accounting mechanism inside a fractional reserve banking system: Banks only hold a portion of the money in reserves, this isn’t news to anyone who has taken an introductory class on macroeconomics. Warner’s comments say the “banks don’t take deposits,” which they obviously do, and “banks don’t lend money,” which again they obviously do. If you really read through the transcript [link] you will see it’s just a semantical game of words like “promissory notes” and “IOUs” that doesn’t actually change the reality that banks make loans and take deposits.
      Banks wouldn’t bother to take deposits if they didn’t need to because depositors are their cheapest source of funding. They pay 0.01% to depositors, but have to pay 0.25% to the Fed. In a fractional reserve system banks only have to hold a minimal amount of money to meet customer demands and then loan out the rest, but its been like this for a couple hundred years. They act as a middleman between those who need loans and those who need a place to store their cash. When they need more funding they borrow from the Fed at slightly higher rates. Loans aren’t inflationary in the same way that printing currency is because the loans are eventually paid back, or collateral is seized. Fiat, Hex, and many other cryptos constantly inflate which reduces their long term value relative to one another.
      I don’t think the choice is only between Hex and fiat or Hex and Bitcoin though there is a lot to choose from that don’t have the same risks as Hex. In fact, I don’t think that cryptocurrency is much of an inflation hedge at all [link]

      1. Sure, but not all loans are secured loans, many are uncollatoralised/unsecured loans. The debt to GDP ratio is getting higher for many big nations and doesn’t look like stopping.
        And sure HEX is risky, but no risk no reward. Savings accounts pay zero interest and stocks are being pumped by inflation so crypto is the best place right now albeit as long as you mitigate risk.
        HEX is anti trading, what I like about it (and other cryptos, but especially this) is nothing is opaque. With the banks we really don’t know 100% what they’re doing, so much mixed info. I love the transparency that HEX gives, you know what you’re getting in to, most other things you really don’t know!

        1. Not all loans are secured loans, but someone has to pay it back, either the client does or the bank eats the charge. The government does not eat the charge for loans originated by banks, therefore, it doesn’t have the same long term inflationary effect that printing money does. (For the national debt, I’m assuming a hyperinflationary Venezuela situation where the government starts printing money to pay down its national debt, permanently, is not going to happen in the US, but basically every crypto will look good in that situation).

          Bank 10Ks and 10Qs tell you a lot of information about their business. BDC filings also tell you who they’ve loaned money to. The knowledge that Hex’s ‘business model ‘ is to only print tokens and distribute them doesn’t make me suddenly accept it as valid, just because of transparency.

          ICP is also anti-trading with their 8 year dissolve delay option. ICP is creating an alternative to amazon/google/microsoft cloud services, which is their most profitable business lines. It may work out, or it may not, but at least there is a business behind the scenes that generates a portion of the income.

    2. 2. That 88% founder’s tax will certainly hamper adoption and there are plenty of choices vying for the magic internet money designation. Stellar, Ripple, Nano are all very established and don’t require $100 Ethereum gas to transfer value. Sure the Pulsechain is coming which will lower the gas fees, but that’s always only a few months away until launch and still requires adoption.

      3. Market cap is important because it represents the ledger of how much value is in everyone’s accounts. It also relates to how much value in new tokens is being minted each year, so yes, its extremely important. Heart just doesn’t want to draw attention to the fact that he owns $139 billion of the supply so he always refers to it as a vanity metric. You can create a trillion coins, but you can’t invent a market for it and sustain that price level, which is why volume has a relationship and is important for market cap.
      “but that’s only an issue if you want to cash out! If you believe in crypto rather than fiat you don’t need to cash out” Most people eventually want to spend their earnings and not just have an imaginary account balance grow until they die. Even if you spend Bitcoin at a merchant, they use a service like BitPay that immediately sells it onto the market to collect their fiat. The world you are envisioning is a world without fiat. It could happen, but governments around the world will do what they can to hamper that scenario from materializing.

      1. 2. Perhaps yes but whether people like it or not from an ethical standpoint I think RH will do everything he can to keep HEX up, he is that smart, such is the power that he can have with that much money. The tax bit I’m not sure about, I would thought only an issue if he sells, maybe I’m missing something here! The HEX in the OA just sits there.

        3. Agree market cap is important but I think we get too hung up on these metrics and volume too. Of course there is also a balance, but what really matters is price action so long as the slippage isn’t too high. Actually HEX market cap on nomics is 35 billion as they removed the amount in the OA because it’s not circulating. Either way I’m not too hung up on it, HEX doesn’t care, people care but HEX doesn’t!

        And yes absolutely I envision a world step by step where fiat is phased out. We’re in a transition now. We went from Yap stones to agri beads to gold/silver to fiat and I think crypto will be next. You have to think long term, not short term. That’s where HEX and BTC (the only 2 for me as they have high demand and low supply..HEX scarcity is through T shares) come in. They are a long term hold, not for pump and dump trading….pump and dump trading is robbing Peter to pay Paul much like you said with HEX, but HEX is the lesser evil in my opinion. Just hold them and in the end I’m confident. I really think HEX will shock the whole crypto community just like BTC. People can question ethics….to me the whole system isn’t ethical and crumbled after 1971 gold standard ending. I now accept this and take the lesser Evil of all Evils :-). It’s the best of the worst in my opinion.

  26. 4. HEX doesn’t inflate at 3.69% a year as such, it’s delayed inflation because the HEX only gets paid when you end your stake so liquid holders are not getting diluted in the simple way that’s explained. The price of anything like shares needs more people to buy in to get the price up, that’s nothing new. But HEX technically doesn’t….the price can remain flat but you still get interest when staked and penalties paid for stakes ending early.

    5. The OA holds up the price and stops a 51% attack. Although possible it could dump the HEX in theory but there is tons of ETH at the OA, would make much more sense to dump that as low slippage and easier to cash out. No founder generally wants to nuke their own creation.

    6. I admit there is risk, but no risk no reward. Many criticisms were directed at Bitcoin early, but look what happened! Bitcoin inflates too at 6.25 every 10 minutes.

    7. The honest truth is the whole lot is a scam….Bitcoin, fiat, the whole economy. HEX just gets singled out because it’s doing it directly such as inflation at 3.69%,etc. So it’s easy to see what’s happening. The rest of the economy is all opaque so harder to scrutinise. HEX is just a better scam than everything else, but people don’t want to think the whole economy is scam so they shut their ears to it.

    1. for 4. Whether the inflation occurs continuously throughout the year or at the end of the ‘stake’ doesn’t really make a material difference to the long term result because the new tokens are still being minted and are stacking up to the eventual sale. Yes, it does hold off on new supply for a while, but that’s a function of how long people’s stakes are and its just delaying the inevitable.
      For 5. 51% attacks are hashing power attacks that allow the attacker to change the blockchain ledger. This is not a concern for Hex since it is a token on top of Ethereum (which is subject to a 51% attack, but super low risk given its massive size). There is absolutely no benefit to anyone else in the Hex system that one person owns 88% of the entire supply. It’s entirely risk that that person will dump chunks of it from time to time which will impede any price ascent and gives him ultimate control on how much appreciation other users get, which is diametrically against the principles of decentralization. I don’t think he will rug pull because that would be only a one time gain and the jig would be up, but he will certainly unload lots of it when the token is on upswings. He could send 90% of his holdings to a burn address and still have millions of dollars of “founder’s tax” and that would certainly alleviate one of the biggest red flags with this project. Instead he has squirrels tens of millions into various wallet addresses for obfuscation.
      For 6. No risk no reward, sure. But why not choose honest projects make economic sense? It’s not a choice between Bitcoin and Hex, but Bitcoin, Ethereum, Solana, Cardano, AVAX, and thousands of other projects.
      Bitcoin is disinflationary and after enough time the inflation won’t exist anymore. That’s not the case with Hex that has to mint currency to pay it to ‘stakers.’
      For 7. Yup, the Fed has really screwed up our economy with the endless quantitative easing.

      1. 6. To me HEX is very honest. Actually its almost too honest and the truth hurts. You can basically see everything that’s happening on the blockchain (except for a few tornado cash things going on with recycling ETH,etc but not 100% proven anyway). HEX knows that people only really care about making money, it’s brutal honesty that I like about it and it’s been specifically designed to do that. It doesn’t beat around the bush! I think ETH, SOL will all do well but because they don’t have the scarcity built into them with a capped supply eventually it won’t hold. Still a good return but not phenomenal like BTC and HEX….so far. When I talk about scarcity in HEX I mean from the T share side, not the HEX token side itself. HEX and BTC are the only 2 cryptos that monetize time and you can’t get time back, that’s so powerful. The scarcity increases with time. That’s why forks of BTC and HEX haven’t worked because BTC is becoming more secure and scarce with time and HEX is becoming more scarce due to T shares. REX and Axion are 1 to 2 years behind that and now can’t catch up because HEX has already built in scarcity in T shares in combination with high demand. Axion is struggling with its game theory (although I still quite like Axion myself). Axion and REX don’t have the demand that HEX has and therefore won’t do as well because its supply AND demand that you need together. So no, in my opinion you can’t just now copy HEX….it’s too late.

        BTW, I love this discussion and learning alot from your views…so thank you! It would be a boring world of everyone always agreed on everything ha!

  27. Yes I do agree it’s a brilliant scam, but that’s because the whole system (fiat included) is a scam. It’s just we don’t see it easily because with fiat it’s all opaque. HEX is confronting because it makes it all clear, it’s not really hiding anything.
    The HEX inflation is a max of 3.69%, typically much lower because stakers don’t get paid until they end their stake so the inflation is delayed. Therefore liquid holders are not get diluted at 3.69% per year, that’s just the maximum.
    Michael Saylor mentioned many times the reason he bought BTC is because inflation isn’t typically 3% as we are old told but more like 20% if you include cost of capital. That’s why he bought BTC to hedge that as a store of wealth. HEX is at most 3.69%, much better than 20% inflation in fiat! Again in fiat it’s too difficult to see it all, you have to do intense research as Saylor has done. With HEX its so obvious so we scrutinise it easily and think it’s special. It actually isn’t, it’s just a better scam than everything else. In that sense I think HEX is a better investment than stocks and all sorts.
    With stocks they can’t be used as a medium of exchange but HEX can be like BTC,etc. I think we confuse stocks because you need liquidity to cash out. With crypto you don’t need to cash out because it’s meant to be the new money essentially so no need to worry about liquidity and volume, just hold the crypto 🙂

  28. 4. Sure but my point here is the inflation is a MAX of 3.69% which isn’t that much. I’m relying a little on the smart Michael Saylor here, but his reason for getting BTC was because inflation in much nearer 20% than the 3% we are told. So HEX isn’t that inflationary and when you account for the deflation in T shares that’s where the real smart part is.

    5. Well in my understanding yes a 51% attack is from a PoW perspective but essentially you can do that with PoS if you have 51% of all the supply as they get to mine the next block, highest staker (although PoS isn’t that simple because after that they go to the back of the queue so they don’t get continuous power to keep mining new blocks). But yes in HEX terms I get your point. What I mean is control of the supply because you can dump it hard. Axion, which is a fork of HEX has this issue because it doesn’t have an OA and it has dumped hard many times. The OA prevents a larger whale from dumping, that’s what I meant.

  29. Thanks for aggregating all of the essential info on Hex into one well-written post. I think the next horizon to explore for us Hex Truthers is what happened/will happen to all the funds from the OA that were disbursed into the hundreds of shell accounts (the ones funded with ETH for gas fees from the Tornado.cash mixer you mentioned).

    Most of these shell accounts seem to have short-term staked their enormous amounts of Hex prior to the “Big Pay Day”, turning amounts of around 900 million to ~1.3 billion a piece. Then their Hex balances sat idle for a long time but were ultimately sacrificed into Pulsechain. A lot of these addresses already have large balances of PLS tokens sitting in them, though it’s not clear whether this is real PLS or just some kind of testnet prototype of the real thing that’s coming.

    In any case it seems pretty apparent that Scheuler’s strategy is to further obscure his holdings by creating a preloaded army of PLS whale sockpuppets that he can use to freely dump on the rubes post-launch, having it all go undetected. He’s built the entire scam on the idea of the OA never selling and being a necessary feature to prop up the economy. But if the OA instead becomes converted to hundreds of mini OA’s and they don’t “sell” the Hex but rather “sacrifice” it into a new asset class on a different blockchain, it will be easier to liquidate the spoils and have it appear that these sales are from legitimate PLS holders rather than Richard himself dumping the original OA funds.

    1. An interesting theory ha! When you say sacrifice the HEX rather than sell the HEX what do you mean exactly? You mean swapping the HEX to PLS? But if that happens that’s basically selling it still, there is now less HEX in the OA or mini OAs. So we would know wouldn’t we? I’m probably missing something here cheers!

      1. It was a transfer from individual holders to the Sens organization, a donation if you will. I think they got some promise of a PLS Hex bonus for doing it.

        1. Ah! He is talking about the actual Pulse Sacrifice phase. I’m well aware of that, I thought he was referring to another Sacrifice.
          Anything is possible but to pull off a scam where something is so public like blockchain is difficult. Different with the whole ICO phase, but at this point in the peice with HEX it will be hard given how much scrutiny it is under. It’s performed so well people are looking at every nook and cranny and still not able to come up with any substantial solid proof.
          But I’m open to the possibility that RH is so smart he could also have a bunch of other wallets he is using to buy more HEX with the ETH to keep up the price.
          Whichever way you look at it, I still think the combination of a smart, rich owner with fantastic game theory is the recipe to huge success here, albeit if the owner isn’t doing totally ethical things. I don’t love it, but since I have little confidence in the whole economic system as a whole and many ethical issues there, Im picking the lesser evil in my opinion with mitigated risk. I have diversified and have stocks too. In crypto you can take small risk for a huge reward.

  30. I’ve done some preliminary research into this but haven’t been able to build a solid enough argument to combat the hordes of mind-rotted Hexicans, nor do I think I’m as well-equipped for this endeavor as you are. So I’m merely sharing these findings as an area for your further investigation. The Pulsechain launch should bring a lot more clarity as to what Richard’s real plan and intentions are, but it will also require more intensive digging to find answers, since the raison d’etre of the Pulse fork seems to be obfuscation of Richard’s assets to provide him an easier exit hatch.

    Also worth looking into where all the ETH paid into the Flush wallet went, though this perhaps brings more new questions than answers. Similar to what he did with his Hex, it was all split into tons of shell accounts, and then routed through layer after layer of additional shell accounts (almost comical given how easy it is to trace on ethscan and how much cash he wasted in gas fees in the process). But ultimately it all ended up in a single shady vault contract. This contract was the #37 largest holder of ETH on the entire blockchain when I checked, the bulk of it being from the original sale of Hex, and it has links to a bizarre defunct Chinese rugpull called “Crocodile King”. The founder of Chainlink’s wallet also pops up at some point along the money trail, which was an odd twist. It’s possible there are some big players adjacent to this scam behind the scenes. I’ve also noticed many of the key addresses involved hold something called a “Security Token” – some NFT-like asset, the purpose of which I can only speculate. Perhaps this signifies some kind of ownership share in the enterprise and there are others involved in the shadows working with Richard.

    There are many avenues to explore, so I can only hope you’ll keep up this important work.

    All the best,

    Yung Scheuler

  31. Such scam tokens or coins bring bad names to all the crypto world. Now NFT has also emerged as a way to make or rather scam money by selling those pieces.

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