On the 3rd of November 2022, Mr whale announced in breaking news that the crypto influencer promoting HEX has been subpoenaed by the SEC.
— whalechart (@WhaleChart) November 2, 2022
With the current crackdown by the SEC on a lot of companies and decentralized projects in the crypto space, the most welcome development by certain members of the space is the crackdown on HEX.
The project has since gone on its telegram channels to release HEXnews. The content of this news is, different ways members of the HEX community can destroy chats and documents relating to their activities in the project. Making statements like “a clear hard drive is a fun hard drive”.
They advised that the best features in telegram are the secret chat, auto-destruct timers, and private messages. That way, not even hackers can access the information from their devices. They went further to advise their users on how American law works and how they shouldn’t talk to the police. Sharing reasons why they should use their fifth amendment rights when questioned by the government.
Now all that sounds very fishy… And it is. The project has always been seen as a scam project with the founder Richard Heart having a long history of criminal activities ranging from extortion to theft and blackmail.
It is believed that the project was built as a way for Heart to launder his own money while scamming others. The project is built this way. Users send their ETH to a master wallet which sends them equivalent value in HEX. Then they use the HEX to ask for loans, lend crypto to other users and carry out other traditional bank-driven activities. In return, they are to expect 40% ROI on their deposits.
The first red flag is, nobody knows who owns The Master wallet that used to run the whole ecosystem and Heart refused to disclose that information during an interview.
The second issue, there are no respectable projects that can sustainably provide a 40% ROI just for lending users funds. Thus as it sounds too good to be true, it might be.
Now HEX might not be a Ponzi scheme sustained by Richard Heart’s money laundering activities, either way, he is now within the sight of the SEC.