SEC Charges Hex Founder Richard Heart with Misappropriating Millions of Dollars | Hacker News Reader

SEC Charges Hex Founder Richard Heart with Misappropriating Millions of Dollars

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168 pointsmfiguiere118 comments

He raised over $1 billion?!…there was really too much money floating around begging for where to invest circa 2020. The same goes for many questionable startups that raised money.

Notice how these schemes have disappeared in tough times.

$1 billion in crypto, so not real money. $1 billion on IOU's from some other ponzi scheme. Right after it states that they're also charged "misappropriating at least $12 million of offering proceeds" which seems like a more reasonable figure. They probably stole in the order of $12-20 million.

The article mentions at least 2 million Ethereum, which is certainly liquid enough to be a couple orders of magnitude above $10 million.

There’s a fair amount of liquidity, but trying to withdraw 1 billion in Eth is going to impact it’s valuation.

ETH has a $223b market cap, so 1b is .45%.

No? It's not?

https://coinmarketcap.com/currencies/ethereum/

Regardless, 1 billion is not 4% of 223 billion. You’re off by a factor of ten.

fixed... =)

0.45%

damn maths. thanks!

Market cap is not market depth, you can't withdraw $223B from a speculative asset with a $223B market cap. Just look at SafeMoon lol. Market cap isn't a bank account. It's determined at the margin by the last transaction price multiplied by the number of units outstanding. Bringing it up in this context is just misleading.

Ethereum's daily trading volume is $7 billion, so it's likely that $1 billion would hardly affect its valuation.

Now subtract out the wash trading. I'm not saying it would or wouldn't affect the valuation, I'm saying that the top-line volume is a known fiction. Remember when "Coinbase Employee A" traded some 99% of the entire global LTC volume between two bots at Coinbase? Sure it's old news, but that's the most reputable exchange. [1, 2]

Much of the crypto market is a digital Potemkin village designed to make you feel like you're not nearly as alone as you are.

[1] https://www.cftc.gov/PressRoom/PressReleases/8369-21

[2] https://news.bitcoin.com/ipo-coinbase-pays-cftc-6-5-million-...

Potemkin as an adjective is such a useful tool when talking about the crypto scene. here's a post from when I used it extensively I guess about 8 years ago, in the same vein. Unfortunately as part of the cold war argot it seems to just draw blank stares from a lot of people under 35 or so.

<https://www.reddit.com/r/Buttcoin/comments/3hrum5/degenerate...>

"Potemkin exchange, Potemkin conversation, it's Potemkins all the way down. Like a matrioshka doll each layer deeper is identical to the one before, but smaller and less articulately defined. "

I wish I could take credit for the term, but I'm also a huge fan of 'Sierpinski scheme'.

Also, what on God's green flat earth was that article about? The one you were responding to, lol. I mean the late Mircea Popescu was a real piece of work, but, just, wow.

Popescu is like the ur-bitcoiner, and by extension the ur-kleptocurrency scumbag. He's one of the handful of people who have (or in his case, had) quite a bit of influence over the perpetual number go up movement of the market cap due to being one of the very earliest large hoarders of coins at penny prices, and a complete Kool-Aid drinking Central bank/central government hating misanthropic troll.

Although I will say in his direct company, he was fairly well-mannered and clearly had a curious mind but one warped by what must have been some sort of Trisomy on the asshole gene.

That article was lifted directly from his blog which, I'm not sure may still be active even now, that contain much of his musings on that same topic as well as lots of others, all as reprehensible and in my view absolutely would have entitled him to an early death - assuming he didn't fake it.

Sierpinski scheme, hah! Now I really want to somehow tie that end with Zooko's triangle. Reminds me of the guy who made a guide to "writing your first ethereum contract in Pyramid Scheme" oh another variation just occured to me: Fractal Fraud

You...don't have to subtract anything.

Liquidity is liquidity.

If liquidity goes away when big boys start selling, then, well, someone would have picked up on that, shown that, with data.

Otherwise, the (very real!) accusations of wash trading and other price fixing don't have tons to do with available liquidity, which as a term, refers to an investors ability to sell in a timely fashion.

You can sell $150M worth of ETH right now on-chain without moving the price much. If you aggregate the other chains and exchanges it's probably close to $1b in an instant sell, of course if you TWAP you'll get much better execution.

Daily trade volume doesn’t represent what it used to as market makers/HFT algorithms get into and out of positions several times a day. What matters for estimating impact is essentially the net flow across the day/week/whatever not the transaction volume. It’s unlikely to precipitate a sell off but a 1+% dip in the short term isn’t unrealistic.

Ethereum has 1% dips regularly, on the hourly. In crypto, that’s generally considered very stable.

By short term I mean weeks to months not minutes.

I doubt anyone would try and liquidate it in a single transaction on public markets.

One transaction accounting for at least 15 per cent of the trading volume for a day absolutely is going to affect its valuation.

Even on Uniswap, swapping 10,000 ETH ($18.5M) has just 0.9% slippage.

There is pretty decent liquidity for ETH and BTC at least, both on and off-chain.

If that’s what people where liquidating then it’s not problem, but 10,000 ETH and 2,000,000 ETH are just wildly different numbers here.

How many things are there on earth that you can suddenly sell $1 billion worth of, and not lower its price? I never hear this criticism of any other assets even though it applies to virtually all of them.

If we're both running our own ponzi scheme and you give me $1 worth IOUs to your ponzi scheme, before later readjusting your ponzi scheme to be worth 1000x what it was previously. I would on paper have $1000 of your money, since that's what my IOU in your ponzi scheme is now "worth". If my ponzi scheme then folds before yours, you could claim that I've defrauded you for $1000, but I'd argue I haven't defrauded you in any real sense, in fact you tried to defraud me, and I just so happened to fail at defrauding my customers first.

Maybe Ethereum is "liquid" enough to absorb that withdrawal (Madoff was plenty liquid until he wasn't), that doesn't mean there's actually any real value.

Lots of stuff has value, until it doesn't. Tulips, beanie-babies, or pet rocks come to mind. Doesn't mean it's a scam necessarily, could just be a fad -- irrational, but with no fraudulent intent behind it.

oh bitcoin, ethereum and any such crypto"currency" (even the name is chosen to evoke certain emotions) is pretty solidly established to be scams. Read

https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-pon...

https://www.ic.unicamp.br/~stolfi/bitcoin/2021-01-16-yes-pon...

or if that's too long then consider how any of these crypto"currencies" with transaction fees are negative sum games and such they are scams (and no, stocks, gold and cash are not such).

> https://ic.unicamp.br/~stolfi/bitcoin/2020-12-31-bitcoin-pon...

> https://www.ic.unicamp.br/~stolfi/bitcoin/2021-01-16-yes-pon...

Points 3, 4, & 5 apply similarly to any investments made in commodities (gold, silver, copper). A direct source of revenue for those commodities themselves is not provided: There are no dividends being paid out just because I hold 1 kg of gold in a safe. Instead, the people that want to use that gold for other purposes is what provides revenue.

Point 1 & 2 can similarly be demanded from commodities as well. The only difference being is that the public market is where I can cash out my 1kg of gold to.

> *By that definition, gold too is a ponzi.* No, gold clearly fails to satisfy that definition on two counts.

> First, few if any gold investors have expectations of profits. They generally invest in gold as a hedge -- a "store of value" -- that they hope will retain its value in case other assets go sour.

There is no difference between the expectation of profits & stores of value: They're facets of the same diamond - Value. The pursuit of one is a masked notion of the other & vice versa - Expectations of profit are a consequence of wanting to retain & accumulate resources against the eroding forces of inflation & entropy in general, & a desire for stores of value is of similar expectation that the overall value grows faster than the eroding forces themselves.

> Second, as a commodity, gold HAS a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry, who take gold out of the market (2/3 of the production) for uses other than re-sale. When one buys 1 oz of gold, one gets a chip of a metal that one can sell to those consumers, and thus obtain some money that does not come from other investors.

Again, as stated above, the gold itself doesn't have inherent value: It's value comes from what can be done with it after being transformed/used for something else.

Similarly, digital services have already been shown to be commodifiable via AWS' EC2 Spot Instances & their fluctuating prices as demand changes.

https://aws.amazon.com/ec2/spot/pricing/

The consequence of this logic is that in the long term, such compute can eventually be accessed by *anyone* from *anyone* willing to sell it via public markets. HOWEVER, such a public market was not yet feasible due to the possibility of such computations not actually being done & fraudulently being reported as such. The stopgap between that future is what we have now: Centralized companies selling compute under trust-based assumptions that do currently work, but that present significant problems related to control over said compute.

The technology was not there yet, but it's being launched now.

EVM-based & Turing-complete VMs in general will generally be made more verifiable with the rollout & integrations of ZK (0-knowledge) proving systems into said VMs. When such computations can be verified to have been genuinely computed within 1/2^n (n >= 64) of an error rate, the addition of a public market to make such compute sellable to people that want said compute is the next logical step, to which Ethereum, its L2 solutions (zkSync, Polygon zkEVM, Optimism, Arbitrum, etc.), & all Lx (x > 2) markets that will come in the future, have already & will provide.

Gold is absolutely a negative sum game. From a technical financial perspective it has negative carry[1] because of the cost of storage, insurance etc. Quite a few other assets are similar (eg art). Negative carry doesn’t intrinsically denote a scam but its fair to say that its much easier to establish a “fundamental” theory for the value of something like a dividend-paying stock that has positive carry.

[1] Negative carry means it costs money to hold an asset on an ongoing basis. Given most assets have transaction costs when you buy or sell, anything with negative carry will be a negative sum game in your terminology. https://www.investopedia.com/terms/c/costofcarry.asp

gold is addressed by Stolfi

> as a commodity, gold HAS a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry, who take gold out of the market (2/3 of the production) for uses other than re-sale.

That is for sure a reasonable basis for a fundamental theory of value for gold - that there is demand other than from investors, but that’s not revenue[1]. Revenue is income generated by an activity or company. As an investor, you don’t get to benefit from cash arising from the demand for jewellery and industrial uses of gold without selling. The mark to market on your position should benefit but you don’t get cash.

So for that reason it is still a negative carry asset (ie it costs money to hold on an ongoing basis).

[1] https://www.investopedia.com/ask/answers/122214/what-differe...

Many of the the more scammy coins engaged in salting the tipjar either by taking investments and then reinvesting them back into the coin in a loop or by making deals to immediately pay back out the investment at close. (see also Charles Hoskinson's big ethereum payout when he left)

This lets them claim truly astronomical levels of participation to better sucker people in to participating... but it turns into a liability when the SEC prosecution comes a knocking.

That's as good as money sir, those are IOU's.

It's a shame it took this long to go after such a blatant Ponzi. There is even an ad for this scheme painted on a wall near my home (in Mexico), so one would hope that the US will not be the only country where he will face charges.

It's crazy how many crypto natives were warning "hexicans" about hex and pointing out the most obvious indicator that it's a scam, namely Richard Heart defrauding them, yet most of his fanboys were not even willing to listen or evaluate the evidence with an open mind.

That would have had them admitting to themselves that their money is gone, including the promised gains they likely already spent.

Came to this thread just to say RIP Hexicans, thanks for providing the space!

I liked local "Italian restaurant ad" Ponzi. I mean it still looked like scam to me, but I can understand why people fell for it. Scheme can only last for few months, a year at most, so the organizer must be ready to GTFO as soon as it reaches the peak. Participants are offered $1k/months for placing the restaurant ad on their car (banner behind rear windshield) but asked for $3k or $4k "security deposit". Of course the "restaurant ad" actually only said "I make $1k/month with this ad, call xxx to learn how".

The SEC is just the wrong organization to be enforcing laws in crypto. This was a scam that was done out in the open and launched 4 years ago. People conned into buying this have already lost their money and they're not getting it back. The founder will use some of the $1B+ he's made of it to defend himself in a long, drawn out court case that the SEC will eventually settle.

The SEC's purpose is supposed to be to protect investors and no one is being protected by this.

the sec also does not bring criminal investigation, only refer. it's not even that effective as a deterrent. only jail stops criminals, not lawsuits.

If not the SEC then who?

It took decades before Bernie Madoff's crimes came to light under SEC investigation (and then eventual criminal prosecution). Most of his victims had already lost their money and were never getting it back, even with the criminal suits they eventually joined that was mostly to show justice to Madoff not to recover lost funds.

From that perspective, 4 years is possibly a record in speediness for scams of this scale. (Cryptocurrencies sure have sped up the scams, but also seem to have greatly sped up the investigations into the spams, perhaps in a way that some will find ironic.)

The SEC can't protect all investors a priori (ahead of time). There's always going to be a long tail of investigations into past misdeeds and airing the dirty laundry. In theory the more dirty laundry the SEC can air from previous misdeeds the more it educates the public on things to look for and the more it assures would-be scammers that eventually they will be caught and will have to face the American justice system. (Whether or not you think the American justice system capable of doling out enough criminal charges that stick to these sorts of injustices, it is always still worth trying.)

> If not the SEC then who?

For US entities other than the SEC in particular, the CFTC that can also handle this problem if the token's not a security.

However, I'm extremely weary of this immediate ceding of control, as it gives back power to the State. The ideal would be that such products would be marked as high-risk by default, and that it should be made explicitly clear that there's a high chance (> 90%) of failure in such a product's early stages, with ample warnings, cautions, & checks detailing so.

Past a certain point, it should be acknowledged that the individual made the decision to invest in such a product. The aforementioned warnings & checks on all new products & services by default will make that boundary clear, with the lack of said checks making it visible .

> It took decades before Bernie Madoff's crimes came to light under SEC investigation (and then eventual criminal prosecution). Most of his victims had already lost their money and were never getting it back, even with the criminal suits they eventually joined that was mostly to show justice to Madoff not to recover lost funds.

Bernie Madoff's scheme was prolonged due to the reputation of the man himself, and from A trusting that B said that he was trustworthy, based on C's vouch of his trustworthiness, based on D's vouch, ad infinitum. After establishing the minimal amount of people to vouch for him, the effects from said connected network compounded as more people trusted him based on that network.

Again, this circles back to the main issue regarding trust. It's way too easy to earn trust just because you look/act some way, were a part of something, and/or made connections to the right people. Trust should be isolated to a particular venture/effort & no further, and if someone wanted to try something else that was at least 2 steps removed from their previous ventures, that trust should be rebuilt from scratch & not based on existing efforts made.

You can't pay for your legal defense with illegal funds. Well, you can, but the lawyers if not careful might be subject to clawback and therefore not likely to defend you.

The craziest part to me is that he was so incredibly open about it and people just kept giving him $. He just made video after video showing himself wearing outfits worth tens of thousands of dollars. Not a video about something else where he happened to be dressed up, but the video was literally about how much the items he was wearing cost. On top of that he looked absolutely ridiculous. I have never seen such a real life example of money not being able to buy class.

I had the strange luck to have known Richard Hart before he became a crypto huckster. In the year or so leading up to his transition from random spammer nobody to wealthy scamming random nobody, he was pretty aggressively critical and cynical about all things cryptocurrency, especially about the abject gullibility and willful ignorance of the people who sign on to all of the ideological nonsense about the blockchain and decentralization, and people who take all of the obviously manipulated metrics about market cap, volume and activity at face value. He could have been your very standard hn cryptocritic, going by his stated positions.

I'm not sure exactly what happened to him in the year or so between when I last encountered him in certain telegram channels, but I get the sense that his reaction to the shit show of cryptocurrency was rather than settling for being another Cassandra with a lot to say and no money to say it about the dangers of the crypto Ponzi scene, he went full Mirror Universe and decided to simply take advantage of the people who he had contempt for, as openly and boldly and shamelessly and transparently as he possibly could. This way he wouldn't have to feel as guilty about fooling them. Like a Stephen Colbert or Sacha Baron Cohen but with more meanness and less talent, and without any remorse for bilking the naive minnows snagged in the bycatch of his cryptobro trawling net.

He very much took advantage of the adage, "a fool and his money are soon parted". On some level I can't even blame him. People are literally sending hundreds/ thousands of dollars in eth to people that just list an address and give vague mention of getting something valuable back. He probably figured, why not me? He could have just moved to Russia and have been fine. SEC frowns upon blatant scams though.

It sounds like the old "create an elaborate smokescreen comprised of the truth" trick. "Surely if he was a REAL scammer he would never do all these blatant scammy things?!"

Jimmy Savile was a master of this: "no actual pedophile would say he will stick his dick in to anyone he can lay his hands on, especially not with all the rumours floating around!?" Well...

It can take a strong person to continue to walk by (what was surely feeling to him) certain, easy wealth that would change his life.

> take advantage of the people who he had contempt for, as openly and boldly and shamelessly and transparently as he possibly could

This is far, far more common on our planet than we are comfortable admitting.

"If we told them the whole time, but they weren't enlightened, we're absolved."

Thank god, that guy was incredibly obnoxious.

You can say that again. A total narcissist scammer of the worst kind. He started with Viagra spam and then found crypto shilling. He liked to hang out on HN to shill his scams and recruit developers, but I may have accidentally made him feel uncomfortable by asking him lots of pointed questions about his past, and he hasn't shown his face in a while. His go-to response is literally "Dodge, dodge!"

His real name is actually Richard J Schueler, under which he is famously known as the "Spam King", for being one of the first people in the world to be successfully sued for online spam, specifically the Viagra spam scheme that he ran from Panama (which he lost).

Richard Hart (aka "Spam King" Richard J Schueler) wins the "Golden Pump Award" for "Best New Scam" for his POS shitcoin Ponzi scheme "HEX":

https://twitter.com/JuanSGalt/status/1233242355995750400

https://www.youtube.com/watch?time_continue=857&v=tf-lJu5iDh...

Peacefire.org beats spammers in court.

https://www.zdnet.com/article/peacefire-org-beats-spammers-i...

>Free-speech group Peacefire.org wins a legal round in its fight against unsolicited e-mail, invoking Washington state's anti-spam law.

>The King County District Court in Bellevue, Wash., on Monday granted Peacefire $1,000 in damages in each of three complaints filed by Peacefire Webmaster Bennett Haselton. The small-claims suit alleged that Red Moss Media, Paulann Allison and Richard Schueler [who now operates under the pseudonum "Richard Hart"] sent unsolicited commercial messages to Haselton that bore deceptive information such as a forged return e-mail address or misleading subject line.

More embarrassing facts and proof he doesn't want you to read here:

https://news.ycombinator.com/item?id=36944841

Given the difficulties in payments when it comes to gray-market dick pills, I’m surprised he wasn’t an early bitcoin whale and made more than enough from that to just retire.

No way. Hilarious. Yeah, I also have noticed that many successful internet scammers, or investment frauds, tend to do it again and again and again.

Among other crimes against humanity is his incredibly gaudy sense of style

https://twitter.com/RichardHeartWin/status/15402954048178831...

https://sybershel.com/he-invented-the-crypto-that-gives-inte...

This guy was famous for posting these photos flaunting how much money he was wearing. It blows my mind to think someone could be this open about doing this

It blows my mind people invest money with a guy doing this so openly

I feel like it's fairly common for scammers to show off a fabulously wealthy lifestyle real or imagined.

For some people it makes them think "whose money did they spend to get all that?" and for others it makes them thing "if I give them my money to invest too soon I'll be on the plane"

It’s true. Designer clothes and social media is a weak flex though. Or, I’m just of an age/mind to see it as such. I can see how people fell for Bernie Madoff at a certain point. The social proof was strong.

You can rent a fancy car, take a selfie with it, post it on instagram saying "DM me for a ONCE IN A LIFETIME investment" and take home $100k no problem. Some people have no idea how money works.

When it comes to both scams and investing, sometimes a kind of ancient "look at me I'm obviously wealthy and successful, so clearly you should treat me favorably and maybe link your fortune to mine" thing going on.

> It was quite a crash, Nakamura Lines. Respectable middle-aged businessmen took to leaving their hotel windows without their lift belts. Me, I kept spending. If I'd started living frugally, my creditors would have done some checking... and I'd have ended in debtor's prison.

-- Neutron Star by Larry Niven

Relatedly, the bizarre "Prosperity Gospel" thing where preachers of a religion ostensibly following a teacher who believed that you should give all your money to the poor (and be sure to toss all the bankers lending money out of your church while you are at it) spend incredible amounts of money on fashion and private jets and expensive homes in some religious message that spiritual wealth is "trickle-down".

I knew this guy from before he was a major league crypto scammer. I assure you although part of this is actual lack of taste, he is quite conscious of how he looks and intentionally turns the tackiness and gaudiness up to 11 even beyond his own sensibilities. It is a filter, designed to screen out people who might have enough common sense the question the legitimacy of his claims.

> It is a filter, designed to screen out people who might have enough common sense the question the legitimacy of his claims.

Well, except for the SEC, I guess.

Out of curiosity, can you say how you knew him?

He used to hang out in a telegram channel that was associated with a vlog which was somewhat popular for a few years in the Bitcoin community despite being somewhat more critical than supportive of cryptocurrency overall, growing more skeptical with time.

I think he was a guest a couple times on the program, and it became a regular in the telegram channel afterward. He had a penchant for ridiculous set dressing even then, although from what I have heard he went way over the top once he started the hex scam.

Wow imagine spending 80,000 dollars to look that bad.

The biggest lie in crypto is that tokens are bought for utility and not speculative gains. I don't know if it's delusion or intentional deception. I have friends who are "thought leaders" in the space, who opine on the disruptive potential of crypto yet spend their days tweeting about the latest memecoin that just 100x'd.

The entire concept of crypto "value" rests upon the marriage of token utility and economic value. Financial gain is baked into the mechanic. And between the two, people care far more about financial gain. It's a fundamental misalignment of incentives.

To be fair the same thing happens in the regular world. e.g. look at a list of the richest people in the USA and see how they made their money.

Elon, Bezos, Bill Gates, Ellison, Buffet, Paige, Brin, Ballmer, Bloomberg, Walton --- which of those billion/trillion dollar companies do you think in any way compares to the shambolic crypto world?

I mean, we joke that Oracle is a legal company with an engineering department... but at least they build things.

Right. I don't like most of the people on that list and e.g. Oracle is a mess of a company that is actively hostile to the software world -- but they still sold $42 billion worth of goods/services to willing customers last year. Nothing at all like crypto trading.

The 20 richest people in the USA all make their wealth via profitable companies that have returned value to shareholders.

My problem is with the collective gaslighting the crypto industry is doing with respects to utility vs speculation. I never thought I would find myself on the side of the SEC, but I have enough experience in the space with investors to builders to confidently say the vast majority of the industry is about speculative gain. Specious claims of utility are often just a means to that end.

All of the 10 richest people in the US, with the exception of Warren Buffett (and even that I wouldn't really call an exception, more on that below), built real businesses with real products that are used by millions of people and companies. I think wealth inequality is a major problem of our time but I despise this painting everything with a (factually incorrect) bad brush.

Re: Buffett is the only "pure investor" in the top 10, but even then Berkshire Hathaway is pretty famous for having a portfolio of some of the best managed companies in the business. It's not like Buffet is a day trader.

Ironically, the only tokens with any actual utility have stable prices - stablecoins.

Aside from BTC, which has so much utility that governments are securing some, and in some cases, are settling international trade with it to avoid sanctions from nations they aren't allies with.

Is that the reason why BTC transaction volume was trending slowly downwards for years?

It took the stupidity of those Ordinals to push the volume up, and all of that was inorganic speculative BS.

What does this have to do with what I said?

Transaction volume doesn't mean a fiddly-fuck, unless you're measuring network effects, and even then, context can become pretty important.

No, if one thing should be clear to someone reading this thread, it should be that there's only one thing that matters: liquidity.

Huh? If transaction volume is immaterial, what utility are you talking about?

Because we were talking about utility, and that "governments were buying it" - not liquidity.

The quality or condition of being useful; usefulness.

A useful article or device.

The most glaring example is the one I already posted above - countries hanging onto it for the times they need to settle outside of more traditional finance channels.

Ask a different question.

> The biggest lie in crypto is that tokens are bought for utility and not speculative gains. I don't know if it's delusion or intentional deception.

It's an attempt to avoid the scope of US securities law: https://www.taftlaw.com/news-events/law-bulletins/utility-to...

The crypto phase only ended up strengthening institutions, because it showed everyone that you do need a central authority. Until enough public internet infrastructure exists to realistically pull off a fully peer-to-peer Internet, we will need trusts, exchanges, and platforms.

Even in competitive sports, you want a referee. If anything, this whole phase has shown me that private platforms, banks, and governments will always have a place in public societies.

I had some interest in HEX after I saw an airplane with a "BUY HEX" banner fly over my house. The major trick is the decimal point. Launch a crypto worth 0.000000001 USD per unit, then when it goes to 0.0000001 USD per unit because of low supply, scream into YouTube: "I GAVE YOU 100X PEOPLE, WHAT MORE DO YOU WANT FROM ME?"

> I had some interest in HEX after I saw an airplane with a "BUY HEX" banner fly over my house.

These sorts of advertisements have been an anti-signal for some time...

fun fact, Richard used to sell email spam software. Is shitcoin pumping a step up or a step down?

Richard is a very charming fellow, very likable, but in a way that cautions you not to let any of your money within a mile of him.

Charming??! I've known enough of his kind that his "charm" immediately sets off all of my Malignant Narcissist Klaxons.

He's charming in the same sense that the creepy guy driving the windowless "FREE CANDY" van is generous.

And you only mentioned the tip of the Spamberg -- it goes MUCH deeper:

Richard Heart - Spam, ICOs, and Death Threats:

https://imnotdead.co.uk/blog/richard-heart

PSA: Crypto HEX Founder is Actually Notorious Criminal ‘Spam King’:

https://blockcast.cc/news/psa-crypto-hex-founder-is-actually...

Richard James Schueler - Friggin Spam King:

https://web.archive.org/web/20190416235350/http://www.panama...

HEX Founder found to be Notorious Criminal:

https://cryptotraderspro.com/hex-founder-outed-spam-king/

Why HEX is a Ponzi and not a solid investment (Part 2): Richard Heart:

https://www.reddit.com/r/CryptoCurrency/comments/kwhjxa/why_...

>During the interview at ANON, Richard confirmed that he was one of the first people in the world to be sued for online spam, back in 2002. This shows us Richard has experience abusing unregulated markets, as he is doing with crypto these days.

Hasn't the last eight or so years of Trump trained people to instantly see through that kind of bullshit, and easily recognize a malignant narcissist for what they are, or does he specialize in fooling the same kind of people Trump still fools?

What kind of person actually makes videos and web pages about themself with titles like:

RICHARD HEART IS THE BEST PERSON EVER! I OWN THE WORLD'S LARGEST DIAMOND.

https://www.youtube.com/watch?v=0TQGzltcKNk

Richard Heart is a force for good:

https://richardheart.com/

Trump is spending $40m of his donations on a legal defense fund, so I'm pretty sure the answer to your question is no.

https://abcnews.go.com/Politics/trump-pac-spent-40m-legal-bi...

yes, that sort of charming

Don't forget this article: '$HEX for the Financially Illiterate' Explains exactly what the "Spam King" had moved into: https://archive.ph/AjfcV

Apart from maybe Coinbase, I just take as a given that every single actor in crypto is a criminal, and so far this assumption has been pretty much bang-on accurate.

And although there hasn't been any evidence of top-level fraud, a Coinbase product manager was sentenced to two years in prison for an insider trading scam: https://fortune.com/crypto/2023/05/09/former-coinbase-employ...

Coinbase is dressed up nicely, but you say basically that all actors and therefore coin creators/owners are criminal, then CB facilitates criminal and is criminal implicitly by turning a blind eye to facilitation at a minimum assumption of involvement. It's been called a casino.

Just to expand a bit on the "maybe," it seems pretty clear that the SEC's opinion is that most of Coinbase's business model is being an unregistered securities broker (except for perhaps allowing trading bitcoin and ethereum), which is illegal.

Maybe Coinbase won't just waltz off with their depositor's money, but their business model appears to be illegal from top to bottom. The SEC alleges that basically everything they are doing is illegal. Even if the SEC is wrong, Coinbase's practice of operating as broker, exchange, and clearing agent is a massive conflict of interest.

I co-founded an a16z and USV funded crypto startup in 2015, and I knew lots of people in the industry.

There are certainly bad actors, probably more than other industries. But it's absolutely nothing like "every single actor."

Many were (and presumably still are) true believers in the technology, and got into it the field with good (though perhaps naive) intentions.

Richard Hart (aka "Spam King" Richard J Schueler) has an account on Hacker News that he used to shill his scams and attempt to recruit gullible HN developers to debase themselves by working on his shitcoins, just like Rick and Morty's "Glooty" alien who's always asking "Do you want to develop an app?":

https://news.ycombinator.com/user?id=RichardHeart

https://news.ycombinator.com/threads?id=RichardHeart

https://news.ycombinator.com/item?id=27139757

RichardHeart on May 13, 2021 | prev | next [–]

Elon is still promoting Dogecoin which is also proof of work. Lots of people will be harmed when it crashes. Nearly all cryptocurrencies crash 85% every once in a while.

DonHopkins on May 13, 2021 | parent | prev | next [–]

Humor: So I'm sure your explanation of why somebody hasn't already successfully implemented practical proof of stake before is totally credible and unbiased! ;)

Not Humor: If somebody will work on it for free, do you promise to pay them in your own cryptocurrency? "Will work for stake!"

RichardHeart on May 13, 2021 | root | parent | prev | next [–]

You don't have to destroy the environment to maintain a database. There's other ways to achieve censorship resistance than waste. Blockchains are are all social consensus anyway.

DonHopkins on May 13, 2021 | root | parent | next [–]

"Do you want to develop my new cryptocurrency?" is the new "Do you want to develop an app?"

https://www.youtube.com/watch?v=jVy0JWX5XEY&ab_channel=Adult...

Edit: [You spoiled the joke by retroactively editing your post and removing your amusing disclaimer that you had a financial stake in shilling POS, and your hilarious call for programmers to help you develop your new cryptocurrency! "Dodge, dodge." That's what makes you so funny! The "Glooty" character parody is spot on.]

RichardHeart on May 13, 2021 | root | parent | next [–]

I see your joke and raise you one joke https://paywithexposure.com/ Also, you should actually watch the interview on the page you just linked. It's amazing.

DonHopkins on May 13, 2021 | root | parent | next [–]

Not a joke:

Confronting Richard Heart of HEX - SPAM KING and Crypto Scammer

https://web.archive.org/web/20201115205631/https://www.coint...

So will you again confirm what the article claims you already confirmed?

>Richard Heart was sued for spamming in 2002 under WA state law. Source:

https://www.zdnet.com/article/peacefire-org-beats-spammers-i...

Is this an accurate quote of your own words?

>When I pressed the matter and asked for a simple “yes” or “no” as to whether he, as the FOUNDER of HEX, knows who benefits from the funds sent to the “Origin Address” he flat-out said “I’m dodging your question.” Dodging the question! He proceeds to repeat “Dodge, dodge.”

https://news.ycombinator.com/item?id=29367412

DonHopkins on Nov 28, 2021 | parent | context | favorite | on: Proof of stake is incapable of producing a consens...

Speaking of POS scammers, what ever happened to Richard "Dodge Dodge" Heart, winner of the "Golden Pump Award" for "Best New Scam" for his POS get-rich-quick pyramid scheme called "HEX", who falsely claims that proof of stake is a proven successful replacement for proof of work, and who shills HEX and tries to recruit unsuspecting developers and victims here on HN and many other places, by making illegal false claims of providing CDs (certificates of deposit)?

To be fair, I'd love to hear him chime in on this discussion, and tell his side of the story, relate his exploits and prosecution as a viagra spammer, and finally answer all those unanswered questions people have asked him, to which he replied "Dodge Dodge".

Not that he's unique or special: POS shills like him are a dime a dozen. But he hangs out here and shills on HN, and has won awards for his deceptive scams (and also lost court cases too), and claims to "help people" on his web site, so I hope to hear from him again.

https://richardheart.com/

Richard Hart (aka "Spam King" Richard J Schueler) wins the "Golden Pump Award" for "Best New Scam" for his POS shitcoin Ponzi scheme "HEX":

https://twitter.com/JuanSGalt/status/1233242355995750400

https://www.youtube.com/watch?time_continue=857&v=tf-lJu5iDh...

Peacefire.org beats spammers in court.

https://www.zdnet.com/article/peacefire-org-beats-spammers-i...

>Free-speech group Peacefire.org wins a legal round in its fight against unsolicited e-mail, invoking Washington state's anti-spam law.

Confronting Richard Heart of HEX - SPAM KING and Crypto Scammer

https://web.archive.org/web/20201115205631/https://www.coint...

>During ANON Summit 2020, I participated in a “fireside chat” with Richard Heart, founder of HEX. HEX is one of the most sophisticated, if not THE most sophisticated scams I have ever seen.

>Why was I so aggressive with Richard? I have a lot of experience fighting with scammers, at events, and in online discussions. I’m familiar with their bullshit techniques. Richard is the sort of “master debater” who will answer a question without actually answering the content of the question. I watched more than 6 hours of his previous talks and learned how to tell when he was trying to avoid a real answer.

>If you don't want to sit through hours of interviews yourself, this 4 minute video not only sheds light on Heart's motivation for establishing HEX, but also shows just how abrasive and crude he can be. This video was not created or edited by Cointelligence.

https://www.youtube.com/watch?v=_MIdlXHedlU

>I want to draw your attention to the quote in the video above: "What am I going to make more money doing? Promoting my token, that I own a whole ton of? Or promoting bitcoin, where I own one-one zillionth of the available supply?" He's clearly in this to make money for himself in any way possible. [...]

>When asked why HEX was not categorized as a security, at around the 21 minute mark, Richard offered an explanation that has no legal grounding. On the website, HEX claims that it is "The first high interest blockchain certificate of deposit." However, HEX has no legal authority to issue CDs. Richard is illegally claiming to provide CDs when in fact the instruments are nothing but glorified savings accounts.

More quotes: "What's up now, fggot? What are you going to do now, you little btch? Get the fuck out of here! That's the dumbest piece of shit I've ever seen in my fucking life. [...] Let me give you some more bullshit, ok?" -Richard Heart aka Richard J Schueler

Richard Heart - Spam, ICOs, and Death Threats

https://imnotdead.co.uk/blog/richard-heart

Richard James Schueler - Friggin Spam King

https://web.archive.org/web/20190416235350/http://www.panama...

Why HEX is a Ponzi and not a solid investment (Part 2): Richard Heart

https://www.reddit.com/r/CryptoCurrency/comments/kwhjxa/why_...

Richard: this an accurate quote of your own words?

Richard, your tag-line "Do you want to develop my new cryptocurrency?" is the new "Do you want to develop an app?"

https://www.youtube.com/watch?v=jVy0JWX5XEY&ab_channel=Adult...

"Dodge, dodge." -Richard Heart aka Richard J Schueler

I knew this comment would be here.

Is this the same guy that made millions as a spam king decades ago, lives or lived in Panama and made the news due to a neighbor murder, and appeared until recently on podcasts /YouTube crypto discussions and interviews dressed as a velvet king?

Surely not that guy. Who would have thought he could be blowing smoke somehow.

Centralized ~exchanges~ (edit: services) defeat the point of crypto (particularly of a blockchain), so people responsible for said centralization are only in it for the money. Thus, the question with all of these companies is how long before they get outed for scamming their customers.

That's a reductionist view, there can be many reasons why somebody would want to temporarily park a portion of their assets on a centralized exchange. It's a a trade off between convenience, security, higher liquidity, trading opportunities et cetera, these are just some that come to mind. One can do all of that and still have the majority of their assets in cold storage. The world is not white and black.

From the Bitcoin whitepaper: "A common solution is to introduce a trusted central authority ... The problem with this solution is that the fate of the entire money system depends on the company"

The vision of course did not include centralized authorities, it's counter to the entire purpose. We already have had digital banks, crypto is not about having digital convenience. It's not the "exchange" part that wasn't envisioned, it's the "centralized" part, because that is the same thing as a bank. That's what the SEC (rightly) made their case on with Coinbase and others. Bitconnect, FTX, Coinbase... that kind of thing was not envisioned originally and is counter to the whole concept and purpose of crypto.

"One can do all of that and still have the majority of their assets in cold storage."

Nice try with the quotes hahah. But no, that is not mentioned in the whitepaper, and you are way off now: Cold storage is a cloud term for long-term storage, it has nothing to do with "cold wallets" - the term centralized exchanges use for "off-chain" assets.

Also this (from bitcoin whitepaper):

"A block header with no transactions would be about 80 bytes. If we suppose blocks are generated every 10 minutes, 80 bytes * 6 * 24 * 365 = 4.2MB per year. With computer systems typically selling with 2GB of RAM as of 2008, and Moore's Law predicting current growth of 1.2GB per year, storage should not be a problem even if the block headers must be kept in memory."

I'm convinced 90% of people talking about crypto don't get it.

meh civil suit. these people are used to being sued or threated lawsuits .

I almost was very sad because I thought this was referring to hex.tech which I love and is great

https://www.reddit.com/r/HEXcrypto/comments/zotxtv/father_of...

Kind of a shoe-shine boy indicator ... time to get out.

> He wears the same hat in every interview

Jesus christ. Guy uses interviews about his murdered daughter to shill his shitcoin?

e: Yep, they're proud of this: https://hex.buzz/steve-goncalves-hex/ Scumbags.

Richard Heart is a force for good.

https://richardheart.com/

Reply on news.ycombinator.com