HEX cryptocurrency, a scam project masquerading as a blockchain certificate of deposit, has seen its price fall by over 99% in less than a fortnight following its launch on Dec. 2. The project becomes the latest cryptocurrency that has caused millions of dollars in lost investment as unwitting investors poured their life savings to the scam. I the article we discuss the massive drop in HEX’s price and possible factors that may have caused it.
The shortest scam is crypto history?
HEX cryptocurrency launched its initial offering on December 2nd 2019 with much funfair and “scam like talk”. On its website the project is termed as the “world’s first decentralized high interest blockchain certificate of deposit”. The project aims at offering users high interest rewards to stake HEX crypto backed by other cryptocurrencies such as Bitcoin.
Did you know that you can lower your entry price on something by buying some lower? For instance if something dropped 90% you could 2x your stack by spending just 10% more than you originally did.
— HEX (@HEXcrypto) December 13, 2019
HEX claims to improve the cryptocurrency space by paying people to take possession of their private keys to enhance storage. For BTC holders the service is free with an open to verify code. The project team further claims over $1 billion dollars in BTC (~141,000 BTC, as price stands) has been claimed for HEX on over 21,000 BTC wallet addresses. Over $500 million has been set aside for ETH, with only about 35,452 ETH claimed for HEX.
Following a number of critics coming forward prior to the launch condemning the Richard Heart-led project as a cash grabbing scheme and a privacy starved platform, the launch on Dec.2 has seen investors lose over 99% of their initial investment.
Starting off at 3700 sats on December 2, the price has plummeted to just under 3 sats representing a whopping 99% drop. Could this be the shortest ICO failure yet?
What the HEX happened?
The fall from grace in less than 12 days is comical even for the poorest of ICOs, and Richard’s recent explanations may do little to convince the market to buy into HEX. While the cryptocurrency holds a sensible value proposition for their users (giving it the benefit of doubt), there remains one huge flaw that may have seen the token collapse 99.3% in the past 12 days.
— starbust (@inversebrah) December 14, 2019
According to a crypto researcher, Dilemma Beats, the biggest flaw in the crypto project lies in the origin address that “will create terrible distribution by giving Richard a gigantic bag of free HEX.” The fear is shared across the community as users remain skeptical of Richard’s motives.
“The AA benefits Richard more than investors, he gets a bunch of free ETH. ETH that can be used to manipulate the AA directly,” he wrote on Twitter. “The federal bonuses give the origin address an equal bonus reward, further diluting the value, benefiting Richard, hurting the investors.”
While the whole competitive advantage of HEX lies is getting rid of the whales, the origin address is built to deposit massive amounts of ETH and BTC in exchange for needless HEX tokens, all Richard’s plan, Dilemma accuses.
Whatever the resolutions from the HEX team, the event signals a need for thorough checks on projects before investing. Do your own research!
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Been in the field since 2015 and he still love everything blockchain and crypto! FC Barcelona fan. Author and journalist. Follow him at @lujanodera.