Hex is a project that’s been around for a while. In fact, it’s one of the first crypto projects I even saw, although I thankfully never bought it. HEX is a brilliant scam, which expertly uses FOMO marketing tactics, builds a cult-like group around itself, and uses deceptive numbers and comparisons to make itself seem legitimate.
But let’s go back to the beginning. Who created HEX? What is it? What makes it a scam? And a dive into the psychology behind its marketing, and its community.
What Is It?
HEX states that it is the “First High-Yield Blockchain Certificate of Deposit” If you don’t know what a Certificate of Deposit (CD) is, then I’ll quickly explain it here. A traditional CD is an account where you lock up your money for a certain amount of time, and the bank loans that money out, paying you a higher interest rate in exchange for you agreeing not to withdraw that money until the expiration date. This helps keep the banks safer from bank runs when they loan out money.
HEX is a Certificate of Deposit, but the problem arises when you look at where the money comes from. Unlike a traditional CD, where money comes from the interest paid on the loan, HEX literally prints more HEX and hands them to you. No yield generation, loans or utility. Just printing money for the sake of printing money.
To quote WantFi, (< Great article BTW. Give it a read!)
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.
Who Created It?
The founder of HEX is Richard Heart, or his real name: Richard Schueler. We’ll get more into his possible control over the HEX smart contract, and potentially fraudulent minting of HEX tokens during the launch, later.
For now, all you need to know is that he created HEX, and regularly interacts with the community through livestreams, talking about various aspects of HEX, crypto, and his other project, Pulsechain. (Another project that I might write an article about as well.)
The Psychology
HEX uses FOMO marketing tactics and claims of large 10000X gains to lure in new investors, who might not know better, or might be convinced by the FOMO marketing to buy because everyone’s saying it’s going to pump.
Even going onto the HEX website, you can see the claims of high returns and FOMO tactics everywhere.
HEX also compares itself to Bitcoin in many parts of the website. They even have a whole section talking about why “HEX is a Better Bitcoin” It continuously compares apples to oranges. For instance, it compares the minting of HEX tokens to pay high APYs through a smart contract on Ethereum, to the mining process of Bitcoin.
Red Flags
There are many red flags that users should be aware of. A lot of these things are quite suspicious, or downright proof of fraudulent activity.
Major Red Flags
- The original HEX purchase address, that accepted ETH in exchange for HEX, has emptied nearly all the ETH into multiple other wallets
2. Richard Heart has not confirmed, or denied, that he has control over the HEX contract address, or that he knows the person/entity that does. This is probably because he needs to walk a fine line to not fall under regulatory scrutiny. (Stating that he does own it would open him to possible financial fraud charges, and stating that he doesn’t could be used against him in the future if it is found to be a lie.)
3. Claims of “safety” “security” or “low/no risk” found on the main website, and in the continuous repeated talking points from the community that legitimately believes that.
3. The official website contains a Scam tab, explaining why it’s not a scam. Name any big crypto project that needs to dedicate a whole section of the top bar of the website to letting you know it’s not a scam.
4. Richard Heart recycled the ETH earned from the ICO back into minting HEX for himself
Smaller Red Flags
- Low liquidity. HEX has very low liquidity on Uniswap, only $22m at the time of writing. Most crypto projects that have been around for as long as HEX have, end up with a lot more liquidity than that.
- Richard Heart has a generally shady past. Now, I won’t use that to dismiss his existing projects, as I do believe that people can change. But it does make you think a little about whom you’re trusting with control over HEX.
To conclude this article, let’s summarize.
- Richard Heart most likely controls the HEX token through the contract address, but has never confirmed or denied that he does control it.
- HEX has no utility, and generates no revenue. It is not like a normal CD, it is a money printer. And from what you’ve surely seen with the U.S.’s current inflation numbers, that doesn’t tend to turn out very well.
- Richard Heart owns a large amount of the supply due to the recycling of ETH back into the ICO contract.
- The site needs to try very hard to prove HEX isn’t a scam, which you don’t see most other projects doing.
HEX uses exploitative marketing, has a cult-like community, a self obsessed, dismissive & rude founder, and no utility. It’s only use is to print more of itself, inflating the supply. It has been abused by the founder to increase his own share of the supply, and is most likely under the control of him as well. Do not buy HEX.
Update [6/6/2022]
Looks like Richard Heart blocked me on Twitter, lol
Thank you for reading! If you enjoyed, give the article some claps to get it out to more people! If you’ve got an opinion to share, or would like me to add some information I missed, drop a comment! This article was not meant to be an exhaustive list of every single issue with HEX, but if there’s anything sufficiently important that I missed, I’ll be sure to include it.
Also keep in mind that I am not a financial advisor! I believe that all of this information is accurate, and I stand by my statements, but this does not mean my words are financial advice! Consult with a licensed professional if you do want financial advice, and don’t immediately trust anything you read online! DYOR!
If you enjoyed this article, you might enjoy some of my other ones! They should appear below if you scroll a bit further! I think you’ll like them! :)
