This is not a scam. That’s not a disclaimer most legitimate crypto sites trumpet, but it’s the core tenet of the Hex cryptocurrency website. Is this a case of “methinks thou doth protest too much?” The louder they proclaim it’s not a scam, the more people wonder. But there are stories out there of people making real money investing in Hex, so what’s the deal? We take a look at Hex from the ground up and find out: scam or legitimate?
What is Hex Coin?
According to Hex.com, Hex coin is:
- The first Blockchain certificate of deposit (CD)
- A crypto with high interest, no downtime and decentralized design
- Ethereum but with lower fees
- Not a scam.
In reality, the website uses a lot of buzzwords to draw people in. For instance, by the nature of investing in a crypto coin, you can’t call it a CD. An investor can’t lose money on a CD – that’s the point – so to call something volatile that exists on a fluctuating market with no guaranteed value a CD is misleading at best. Investopedia explains, “A certificate of deposit (CD) is a product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time. Almost all consumer financial institutions offer CDs, although it’s up to each bank which terms it wants to offer, how much higher the rate will be compared to the bank’s savings and money market products, and what penalties it applies for early withdrawal.”
CDs generally provide a less risky investment than stocks or bonds – because there’s a minimum value that grows over time as opposed to leaving it up to a market that can vary wildly in value – but a lower rate of return because of that security.
Hex promises to be a CD that gives you a high interest rate – the website advertises 38% on the cover page, although a video further down suggests around 3% is minimum and 25% is average. If Hex were all it promises to be, that would be an impressive interest return – but there’s more to it.
Because it’s set up to be a CD, a video explaining the Hex system chides people for planning to pull their money after a year or two (remember, a CD requires a term when the investment is made so you have to choose a length of time to let your investment mature). According to the video, you wouldn’t cut down a fruit tree before it has borne all of the fruit it was going to bear after maturing, so why would you pull your money out after only a year or two? Why not 12 or 15, the video suggests?
What this means is that investors are in for a dime, in for a dollar. Once you’re in, you’re locked into the flux of Hex – for maybe fifteen years. That’s great for people at the top of the company – they know your investment is locked in and bolstering the value of their coin. But what happens if – in the next 15 years – the crypto world tanks? There are no guarantees from Hex – disclaimers on the website suggest that people are investing at their own risk and it’s all just codes on the Blockchain, so buyer beware. WantFi suggests that Heart may own as much as 88% of Hex coins, and that gives him a frightening amount of control over the value of everyone else’s investment.
But despite those ample warnings, the way Richard Heart and his army of Hex warriors – known as Hexicans – portray Hex is a sure thing with a high return. Who could refuse? And that’s not to say people can’t make money – they can. Especially if you’re some of those original investors now being bolstered by investments from new people. It’s almost like there’s a word for that – oh yeah – Ponzi scheme.
All you have to do is buy Ethereum coin and exchange it for Hex. And where does all that Ethereum coin go? That’s the ticket behind it all. An investor’s Ethereum goes to Hex – likely straight to Heart, which we’ll get to in a moment – and all you get in exchange is a crypto coin he made up that he promises will grow in value if you just keep your money tied up in his company for a long time. Goldman Sats wrote an article exposing the complexities behind Hex and explains that it’s not just a Ponzi scheme – it’s far more sophisticated and insidious.
And about that “going to Heart” part of the Ethereum coin mentioned above. A disclaimer on the site – Hex sure loves those – explains, when you break down the jargon, that around 45% of the Hex value rests with the Origin Address. It’s designed to sound benign – but if you really think about it, that means nearly half of the company’s value is held by – whom? Most likely, Heart.
Who is Richard Heart?
That’s a lot of information, so it might be time to answer the central question that helps enlighten the truth behind it all: who is Richart Heart? For one, his name isn’t Heart. It’s Richard J Schueler. And he has a history that’s not so rosy.
AZCoin explains, “The connection was then made between Heart and a criminal network operating in Panama from 2005 to 2007. A list of laundry crimes, including theft, extortion, and blackmail, is linked to the Heart’s various aliases in Panama at the time. Heart’s supposed cohorts include bandits, extortionists, and corrupt lawyers and judges, according to posts from Panama-Guide.com, no longer exist.
In 2002, Heart was successfully sued by Peacefire.org for violating Washington’s anti-spam law. However, Heart’s dark past as the ‘Spam King’, maybe the most disturbing truth to appear.
A 2007 Google Groups post by Miguel Antonio Bernal mentioned Heart / Schueler belongs to a new breed of thieves. The post describes the process of American criminals flooding into Panama to rob, cheat, and blackmail local entrepreneurs using Panama’s weak legal system.”
While he wears flashy sparkly suits and uses wealth to dazzle and draw people in, his history involves making bank off male enhancement supplements and anti-aging remedies that were all, of course, bogus. So is he a crypto leader and visionary, or a Spam King?
Head to your email, open your Junk or Spam folder, and take a look at the first spam email touting male enhancement products – that is the essence of Heart’s past.
Is it a Scam, Spam, or Legitimate?
Maybe he turned over a new leaf. Maybe the king of spamming and scamming woke up one day and decided that he’d bring strangers along on his ride to success. But like most orchestrators of Ponzi schemes – he benefits the most when people at the bottom take the fall.
Cointelligence’s On Yavin spoke with Heart in depth about Hex and was given very little substantive information. Yavin even shared a screenshot of a conversation held with a friend who was a supporter of Hearts, and it reveals the depths to which scam victims fall prey to the charisma and momentum of professionals like Heart.
If you’re lucky enough to make a big enough investment and hit on just the right time before Hex crashes – which it inevitably will, and you won’t be able to pull your money easily – maybe you can make some money. Scams are sometimes lucrative like that. But the main lesson here is: know what you’re getting into, know who Heart is, and caveat emptor – buyer beware. Scams lie just over the horizon, if you’re not one of the lucky ones.