HEX, a Bitcoin-Linked ‘Ponzi,’ Slammed by Analysts

Behind the idea is Richard Heart, a serial entrepreneur, marketing expert, and cryptocurrency proponent. Heart has spent much of the last year promoting HEX, which was originally known as Bitcoin HEX.

HEX and Its Warning Signs

Upon visiting the project’s website, various red flags are immediately apparent. The most significant is the rate of returns HEX claimants or investors can look forward to. The site reads:

“HEX IS DESIGNED TO INCREASE IN VALUE FASTER THAN ANYTHING ELSE IN HISTORY.”

The system reportedly allows users to earn interest payments on the HEX they hold. Heart claims that a yearly ROI could be as much as 369% depending on the number of people staking HEX tokens via smart contract. These rates of returns will, in theory, attract new people to stake HEX and this demand will result in a rapidly surging price. There are two methods by which someone can take exposure to the ERC-20 tokens. The first is by making a claim on Bitcoin held in a personal wallet prior to a snapshot taken at the start of this month. Each Bitcoin held will award 10,000 HEX with the number declining the longer from the snapshot they leave it before making their claim. Claiming requires the use of an active Bitcoin private key, which has caused many observers to call it a potential privacy leak. In a lengthy article, journalist Vlad Costea discussed how those less savvy at preserving their anonymity online risked exposing their Bitcoin holdings to the world when claiming HEX. This, for Costea, presents a clear security risk to those wanting to claim HEX tokens. The second way to get HEX tokens, and the reasoning behind even more of the criticism levied at the project, is by buying them with ETH. Heart, on the website, claims that “over 21,700 ETH has joined the transformation lobby to be turned into HEX”. In reality though, the Ether doesn’t get “transformed.” You’re buying the already created units from Heart and he stands to profit handsomely.

Critiquing Heart’s Plans

Several notable cryptocurrency market analysts have critiqued Heart’s HEX plans. With the project now live and having generated more than $3 million in ETH, these criticisms are getting louder. Podcaster Peter McCormack and YouTube technical analyst Tone Vays have both recently aired lengthy editions of their respected shows to discuss the Bitcoin-related investment scheme. Another taking particular issue with HEX is trader and economist Alex Krüger. In a reasonably detailed Twitter thread, Krüger calls the project stupid, those behind it greedy, and those investing in it “suckers.”

1/ A short thread on $HEX, stupidity, and greed.$HEX is the latest useless ERC20 token. Its ongoing token sale has raised about $3 million in $ETH. Its only purpose is to hopefully go up in value by attracting new suckers.

— Alex Krüger (@krugermacro) December 5, 2019

Responding to the attack, Heart himself took to Twitter to ask Krüger to appear on YouTube with himself to talk about the specific grievances he has with HEX. However, Krüger declined, stating that he merely expressed his doubts about the project and that people can do whatever they like with their own money. The project was also recently promoted on The Pirate Bay, as BeInCrypto has previously reported.

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