/biz/ - Business & Finance

>>53777613
About $7 million of Ethereum was withdrawn from the Hex origin address about a month after launch. It was conducted with 36 transactions of 1,337 ETH. 1337 is “leetspeak” for leet, which means “elite.” Hackers in the 1990s referred to others as elite if they had the best hacking skills being able to infiltrate corporate servers and websites. To me this looks like a cocky message basically bragging about how he bilked millions of dollars out of suckers.

Also, during the first year, there was nothing stopping Heart from creating a continuous loop by sending Ethereum to the origin address, receiving Hex, then sending the received Ethereum to a different address (maybe even through a laundering mixer to obfuscate this activity), and then sending it right back to the origin address for more Hex. He could mint himself as much Hex as he wanted and he did. We’ll talk about how much Hex he owns in a later section.

How could anyone ignore that fact alone and not see how much of a scam it is?

Instant User Base
To get it started with an instant user base, Heart offered free Hex tokens to anyone who had Bitcoin by a deadline and then submitted a claim to the website.

He advertises it like it was some great act of magnanimity, but in reality Hex would have no value if only he owned 100% of it. These Hex tokens were minted out of thin air and it didn’t cost him anything to give them out. It gave the appearance to outsiders that there was a thriving community with thousands of Hex participants, which is again a standard marketing tactic for “social proof” (as mentioned in my crypto scams article).

Furthermore, those early entrant’s gains are paid for not by Richard, but by later entrants who provide their exit liquidity.