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Crypto Investors’ Ethereum Secretly Used to Prop up HEX ‘Scam Token’

Last Updated September 27, 2020 2:20 PM
Greg Thomson
Last Updated September 27, 2020 2:20 PM
  • The HEX purchase address used 50 ETH to buy more tokens.
  • The tokens were then sent to an exchange to provide liquidity for HEX traders.
  • HEX continues to benefit its founder, to the severe detriment of its investors.

Ethereum (ETH) from the flush address of the controversial HEX cryptocurrency is being recycled to buy more tokens, as shown by a breadcrumb trail of transactions on Etherscan.

The ETH were then sent to a cryptocurrency exchange with the apparent intention of boosting the liquidity of the alleged “scam token.”

Creator Richard Heart claims he doesn’t know who controls the $6.5 million worth of Ethereum that sits in the flush address. Regardless, it has been estimated Heart will control from anywhere between 45-70% of all HEX tokens in existence via the token’s origin address.

Ethereum Tokens Recycled Back Into HEX

Ethereum, HEX, Richard Heart
ETH from the HEX smart contract finds its way back into HEX’s circulation. Recycled in four steps. | Source: @Run_BTC, Twitter, Gruffalo, HexRekt Telegram 

The screengrab above illustrates the recycling of 50 ETH, which begins in HEX’s flush address and ends up back in its token supply – via a series of dummy addresses and exchanges.

While Richard Heart – also known by a number of aliases – continues to refute any association with the Ethereum flush address, he still stands to profit greatly from his creation.

HEX is designed so that the origin address (i.e., Heart’s address) receives copies of all the bonuses gained by investors. That’s in addition to a portion of any penalties incurred by HEX stakers.

Some have estimated that the origin address (OA) received bonuses of around 500 million crypto tokens per day in December. From a Reddit post which delves into HEX’s “We are all Satoshi”  bonus:

This bonus is essentially all of the unclaimed HEX that is to be paid out proportionally to all stakeholders after the initial BTC free claim and AA (Adoption Amplification) phase is over with. Since a copy of all bonuses and penalties in HEX get paid to the OA, this bonus is also being paid proportionally on a daily basis to the OA which amounts to about 520 million HEX per day.

Heart’s margin for profit is encoded in the cryptocurrency itself.

Stake HEX Again

But wait, there’s a third layer to this pyramid, and that’s the HEX staking system. Assuming tokens from the origin address made it onto the staking net, they would reap yet another round of bonuses.

…those same HEX tokens in the OA that were created as a copy of the WaaS bonus out of thin air, are now being staked for 10 years in other addresses, and YES these address will get another significant chunk of the WaaS (We are all Satoshi) bonus + interest that is meant to benefit all of the other HEX stakers.

Despite marketing his crypto token as being “designed for 10,000x returns over 2.5 years,” Heart appears confident that he will avoid the dragnet of the SEC. That’s largely thanks to hiding behind a series of automated smart contracts which he claims to have no control over.