Supporters of the HEX token are panicking after founder Richard Heart scrubbed his social media profiles of any reference to his crypto projects.
This week, devoted HEX supporters (‘Hexicans’) noticed that Heart’s Twitter profile had deleted any reference to Hex.com and his side projects PulseChain and PulseX. Around the same time, Heart tweeted that he’d “deactivated” his bling-heavy Instagram account in order to “show more humility and respectfulness.”
To show more humility and respectfulness I've deactivated my Instagram account.
— Richard Heart (@RichardHeartWin) March 7, 2023
Following some alarmed reaction that Heart’s long-expected rug-pull of Hexicans had begun, Heart reinserted ‘Hex.com’ into his Twitter profile and posted a screenshot of the rejigged profile superimposed with cartoonish scribbles reading “I love Hex!” But many observers remain convinced that Heart’s original, unpublicized deletions reflect his sincere desire to distance himself from the controversial Hex project and the long-promised but never-delivered Pulse.
With the U.S. Securities and Exchange Commission (SEC) currently ramping up enforcement actions against multiple ‘crypto’ projects, speculation is high that Heart feels his neck may be next on the chopping block. Last November, the SEC issued subpoenas against some high-profile Hex/Pulse online promoters that might possess “documents and data that are relevant to an ongoing investigation.”
Heart has always been a shameless promoter of his projects, enticing new ‘investors’ by flaunting his allegedly unimaginable wealth. This included public claims that he owns “the world’s largest diamond, quickest Ferrari and most expensive Rolex’s ever made. I have $10M in watches and $3M in cars.” Heart routinely posts photos of himself draped out in hideous but expensive designer outfits in the apparent belief that sentient beings were actually buying his schtick.
Sadly, it seems brainless hordes aren’t confined to zombie movies, as the burgeoning ranks of credulous Hexicans amply demonstrate. Many in the ‘do your own research’ crowd evidently failed to do even a trifling amount of digging into Heart’s background, which is filled with enough red flags to equip every bullfighting ring from Barcelona to Guadalajara.
‘Florida man’ says it all, really
Richard Heart was formerly known as Richard James Schueler and earned the title of ‘Spam King’ for issuing unsolicited commercial messages with deceptive subject lines and forged return email addresses. In 2002, the Florida-based Schueler was among those who lost a civil judgment for violating Washington State’s anti-spam laws.
Bennett Haselton, the Washington-based webmaster who brought the civil suit against Schueler, later told Panama-Guide.com that Schueler “called me on the phone once and admitted that he was the guy who sent the spam and made a lot of money from it. He said that if I sued him and won that he would ‘do every dirty trick in the world to get even.’”
A few years after that, Schueler moved his operations to Panama (allegedly due to cheaper labor), where he later claimed to have been the victim of an elaborate shakedown by local officials. However, Don Winner, editor of Panama-Guide.com, claimed that Schueler himself told him that the Panama operations focused on “creating a way to facilitate corruption and bribe taking in Panama.”
By 2017, after Schueler had reinvented himself as Richard Heart, he discussed plans for an initial coin offering (ICO) in a Telegram group, saying he planned to “have a token in 30-60 days.” When another chat member asked, “don’t you have to solve a lot of hard problems before you have a token,” Heart said, “lol you don’t know much about tokens I guess.”
(Despite his obvious affinity for ICOs, Heart later claimed that he’d “tried everything I could to kill shitcoins and to kill the f**king ICOs,” only to conclude that “I was wrong and everyone else was right and everyone else made a lot of money.”)
When another member of this Telegram chat—Jonathan Sterling—pressed Heart as to his real identity, Heart begrudgingly posted a link to a Panama-Guide.com article that revealed his original Schueler identity. Clearly irked, Heart went on to threaten Sterling by saying he would tell the Panamanians who’d previously “threatened my life” that Sterling was “my partner now … I’m going to let them know that you’re my dude please do give them a google we’re buddies now.”
Just one month before Hex launched, Heart decided to boost his public profile by heckling Dr. Craig Wright at a conference in Malta. The resulting online notoriety was just the ticket to ensure a successful launch for HEX and yet another illustration of how nakedly manipulative Heart can get when seeking to boost his bottom line. Making him another example of those who call Dr. Wright a scammer eventually being exposed as the real scammers.
Money in, play money out
Hex launched in December 2019 as a “certificate of deposit on blockchain’—in reality, an ERC20 token on the Ethereum network focused on yield farming—and almost immediately attracted suspicions that it was a scam.
Despite wild claims that it was “designed to do over 10,000x returns in under 2.5 years”—followed by claims of HEX’s price going “up 11,500% in just 129 days”—the project’s mechanics seemed overly focused on soliciting ETH from new investors and giving them HEX in return. The ‘yield’ on investors’ staked HEX is paid out in more HEX, forcing investors to unload their HEX on some greater fool to realize an actual return.
Investors are encouraged to stake their HEX for extended periods—up to 15 years—with penalties for those who bail early. There are also penalties for not ending one’s stake within a tight window following maturation. Half of these penalties are redistributed to more disciplined HEX stakers, while the other half appears to go to Heart himself.
This represents much of the controversy surrounding the HEX project’s design, which diverts a good chunk of users’ tokens into wallets widely perceived to be under Heart’s control. Heart has feigned ignorance of who controls these ‘Origin’ and ‘Flush’ addresses, likely because acknowledging they’re under his control would undermine his incessant declarations that HEX isn’t a security under the Howey test.
The Flush address has sometimes contained millions’ worth of ETH before periodically being drained completely by parties unknown for purposes unknown. Some of this ETH appears to be used to buy HEX tokens on platforms such as Uniswap to make HEX appear more popular and artificially inflate the HEX token price, thereby encouraging a constant supply of fresh fish to keep the scam going.
HEX further added to its Ponzi-like credentials via the individuals who chose to promote it online. These included Craig Grant and Trevon James, both of whom had earned crypto infamy long before they were prosecuted by the SEC for promoting the Bitconnect scam.
Checking for a Pulse
Like all scam promoters, Heart saw the value in constantly upping the ante regarding project goals. Presenting himself as a visionary, Heart declared his intention to build the PulseChain, an Ethereum fork with lower transaction fees that Heart claimed would reduce the costs of running the HEX smart contract code.
To sweeten the pot, Heart promoted PulseChain, promising that existing liquid HEX and staked HEX balances would be migrated to the new fork. Effectively, this airdrop would double a user’s current holdings, although “the market” would determine what value the original HEX chain’s contents retained following the migration to Pulse.
Cynics (or realists) saw Pulse as a means for Heart to further obfuscate the trail of the vast quantities of ETH withdrawn from the Flush Address. Regardless, countless ‘Hexicans’ pledged their tokens to the new chain following its announcement in mid-2021 ahead of its planned launch that August.
But that launch still hasn’t taken place. Heart claimed developers were testing multiple PulseChain software clients this January on a “private v3 testnet.” Heart makes the occasional claim about this testnet’s launch arriving in a matter of ‘weeks,’ but the mainnet’s timeline is anyone’s guess.
Meanwhile, users with billions of HEX locked up for the better part of two years are growing antsy. The aforementioned penalties for early withdrawal discourage such actions, but some users have begun to refer to the entire Pulse project as a ‘slow motion rug.’
He’s not the messiah
Like most function-free tokens, HEX enjoyed a brief value surge during the late-2021 crypto bubble. After spending most of its existence hovering around the 1¢ mark, HEX shot up to nearly 50¢ in September 2021 before crashing hard that December. After starting 2023 below 2¢, HEX currently sits around 6¢, although it’s trending down this week.
While HEX loves to promote the outsized gains that some Hexicans have allegedly enjoyed via Heart’s scam, for most users, the deck was always stacked against their coming out on top. And with SEC boss Gary Gensler on the warpath against crypto fraudsters, HEX seems a likely recipient of a Wells notice. And given Heart’s highly public flaunting of wealth fleeced from his uncritical crypto flock, criminal charges aren’t likely far behind.
Heart’s social media cleanup strongly suggests that he’s belatedly realized that simply repeating that ‘HEX isn’t a security’ isn’t the foolproof immunization strategy he thought it was. While this link is satirical, we wouldn’t put it past Heart to suddenly declare HEX a religion and thus free from pesky rules around fundraising.
Eagerly awaiting Heart’s tweets featuring himself nailed to a cross while bragging that the spikes are made of 24k gold. Then again, his hands wouldn’t be able to reach his phone. Society’s loss, we’re sure.
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