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Crypto Startup Helium Promised a 'People's Network.' Instead, Its Executives Got Rich. (forbes.com) 52

Posted by msmash from the fool-me-55th-time,-shame-on dept.
Helium was touted as the best real-world use case of Web3 technology. But as it struggles to generate revenue, a Forbes investigation found that executives and their friends quietly hoarded the majority of wealth at the project's inception. From a report: A review of hundreds of leaked internal documents, transaction data and interviews with five former Helium employees suggest that as Helium insiders touted the democratized spirit of their "People's Network," they quietly amassed a majority of the tokens earned at the project's start, hoarding much of the wealth generated in its earliest and most lucrative days. Forbes identified 30 digital wallets that appear to be connected to Helium employees, their friends and family and early investors. This group of wallets mined 3.5 million HNT -- almost half of all Helium tokens mined within the first three months of the network's launch in August 2019, according to a Forbes analysis that was confirmed by blockchain forensics firm Certik. Within six months, more than a quarter of all HNT had been mined by insiders -- valued at roughly $250 million when the price of Helium peaked last year. Even after the crypto price crashed, the tokens are still worth $21 million today.

Cryptocurrency companies typically compensate early investors and employees for building their offerings with an allotment of tokens, and disclose these rewards in blog posts or white papers. While Helium and its executives have publicly discussed their incentive plan -- a scheme called Helium Security Tokens, or HST, which guarantees about a third of all HNT for insiders -- they haven't previously disclosed the additional windfall taken from Helium's public token supply, worth millions, that was identified by Forbes. This means that at a time when Helium rewards per hotspot were at their highest, insiders claimed a majority of tokens, while little more than 30% went to Helium's community. Each hotspot earned an average 33,000 HNT in August 2019, according to blockchain data; today, each hotspot only earns around 2 HNT per month. Some insiders exploited vulnerabilities known to the company to increase their hauls even more.
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Crypto Startup Helium Promised a 'People's Network.' Instead, Its Executives Got Rich. More

Crypto Startup Helium Promised a 'People's Network.' Instead, Its Executives Got Rich.

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  • Ahem, yes? As expected? (Score:5, Insightful)

    by gweihir ( 88907 ) on Monday September 26, 2022 @03:50PM (#62915885)

    That is what scammers do: Promise a lot, deliver nothing and, if they are good scammers, get rich.

    • Re:Ahem, yes? As expected? (Score:4, Interesting)

      by geekmux ( 1040042 ) on Monday September 26, 2022 @04:18PM (#62915973)

      That is what scammers do: Promise a lot, deliver nothing and, if they are good scammers, get rich.

      You misspelled politicians.

      • Politicians fall in the general group of "scammers"

        • Politicians fall in the general group of "scammers"

          So what general group do voters who believe politicians every time fall into?

          Wait don't tell me. Let's make a well-educated-gig-worker guess...victims?

          • So what general group do voters who believe politicians every time fall into?
            Wait don't tell me. Let's make a well-educated-gig-worker guess...victims?

            yep

            • Fuck I botched the link. Clearly I also got a public education.

              https://theintercept.com/2022/... [theintercept.com]

              • "In May 1970, Reagan had shut down all 28 UC and Cal State campuses in the midst of student protests against the Vietnam War and the U.S. bombing of Cambodia."

                Shut them down? Wow. It would be a comedy of epic proportions to watch something like that happen today. Thanks for the interesting link.

              • If only there was a technology that would -and stay with me now- allow a user to edit a post.

                I know that someday science will make this possible, but yeah, if only...

                • There is. It's called the preview button. I usually use it. When I do not, I often regret it. That's on me.

          • Re: (Score:2)

            by gweihir ( 88907 )

            victims?

            While it is not very friendly, I have stopped believing that. I think voters are almost completely responsible for the damage they do. This does not come from a moral perspective though, but from the possibilities to fix this. i.e. a causal perspective. Obviously, there will always be crap people with big egos, small skills and a deep desire for power. So the dangerous type of no-honor politician and the somewhat less damaging "well meaning" (but basically incompetent) one will not go away. Also, it only ta

    • "You fucked up - you trusted us!" - Helium
    • Comment removed based on user account deletion
    • But there is no scam here. The network has only been built out in the last couple years. Literally nobody has been scammed but I see a lot of people who donâ(TM)t know what theyâ(TM)re talking about dog piling in ignorance.

      • Re: (Score:2)

        by gweihir ( 88907 )

        I see you are with the scammers. A necessary component of a long-term scam is repeatedly claiming that there is no scam. Usually done by fellow scammers hoping to get rich as well and by "useful idiots". No idea which one you are.

  • really? (Score:5, Insightful)

    by Joce640k ( 829181 ) on Monday September 26, 2022 @03:59PM (#62915909) Homepage

    Is there a single cryptocoin where the inventors DIDN'T "pre-mine" a load of coins for themselves before scamming the 'investors'?

    (Answer: NO - every last one of them is a pyramid scheme...)

    • Re: (Score:2)

      by Scoth ( 879800 )

      Maybe Dogecoin? I feel like it was originally created as a joke and just sort of thrown out there by the creators to see what happened. But it was supposed to be a joke/meme and not any kind of actual moneymaking thing or investment, so it was a little different. Of course, now it's just another crypto.

      • Maybe Dogecoin? I feel like it was originally created as a joke and just sort of thrown out there by the creators to see what happened.

        You can bet your life that they "pre-mined" a few coins for themselves. Just in case.

        • Re: (Score:3, Informative)

          by Jean-Clod ( 8104012 )
          Nope. [decrypt.co] Jackson Palmer and Billy Markus started it, and walked away a couple of years later because they found crypto enthusiasts to be deplorable.

    • NFTs are sort of the same way. An insiders club gets notified before a new batch appear so that they can buy some then pump and dump.

    • There was no pre-mine with Helium. Tokens were distributed only to hot spot owners. The early investors and company members were the first hotspot owners because, of course they were. This post is based off a Forbes article written by an agenda driven writer who gets ALOT wrong.

  • Helium (Score:2)

    by PPH ( 736903 )

    Never trust anyone with a high, squeaky voice.

    There's a reason they cast James Earl Jones as Admiral Greer in Hunt for the Red October.

  • So the earliest to mining told their friends and families. mining rewards are obviously highest in the beginning because thereâ(TM)s the most risk and the token is cheap Yea satoshi would be the richest BTC holder according to the on chain data. Does BTC lose its decentralized ethos because someone got rich? Iâ(TM)m not saying anything the article is saying is wrong. Most of it is true. Itâ(TM)s all spinâ¦

    • So the earliest to mining told their friends and families. mining rewards are obviously highest in the beginning because thereâ(TM)s the most risk and the token is cheap

      Especially if you can do it before the launch and take your time over it.

  • Well DUH! (Score:4)

    by Chas ( 5144 ) on Monday September 26, 2022 @04:00PM (#62915921) Homepage Journal

    This is just par for the course for crypto.

    Anyone who bought the kumbaya BS?

    DUMB.

  • Haven't we established crypo is a scam? (Score:5, Insightful)

    by Somervillain ( 4719341 ) on Monday September 26, 2022 @04:10PM (#62915945)
    Bitcoin came out in 2009. It's been mainstream for over 10 years. If there was any legitimate use beyond crime and scamming people, the financial establishments would be all over it. I wonder if we would have so many ransomware scams today if it wasn't for cryptocurrency. I can't see a way it's made our lives better, but I can definitely see many ways it made our lives tangibly worse. Fuck every crypto scammer and exchange. I hope the exchanges get regulated into oblivion and every scammer gets a jail sentence.

  • Anyway...

  • Fraud. Nothing more, nothing less. (Score:3)

    by devslash0 ( 4203435 ) on Monday September 26, 2022 @04:14PM (#62915963)

    In the financial sector, if crypto was regulated, if you use insider advantage for personal gain it is the very definition of the insider trading and fraud.

  • Another day, another cryptoscam (Score:3)

    by Opportunist ( 166417 ) on Monday September 26, 2022 @04:18PM (#62915977)

    Could we maybe just report when something about crypto does not end up to be a scam? I mean, essentially what's going on here by now is like reporting about ice on the South Pole. I mean, yeah, we know it's there, it's been there, it is there it will be there, it's not like there's anything new here.

    Just report when something crypto related doesn't end up in the people setting up the whole deal scamming everyone who is stupid enough to dump money on them. That should pretty much also mean that we won't have to endure anymore crypto stories.

  • the internet could be described in almost the same terms.

    • The web is not the internet, which worked pretty well in the days before, and early days after, the world wide web. I really miss those days.

      Since the web has been "democratized", it has become a cess pit of scammers and scamees. Most scamees are some combination of simple ignorance, plain old stupidity, and mindless greed. For the foremost, education could help if there was some network of educators. You can't fix stupid. The greedy deserve whatever happens to them.

      • I wasn't referring to scams, only the intrusive monetization of just about every web site. Many are vulnerable to low probability speculation trades in part because of the widespread legitimization of their platforms by the financial media. "You can't fix stupid" isn't very helpful, even as a folksy axiom. There have always been inexperienced investors, it's just that they've never been able to be assaulted by offers and "opportunities" on such a scale before. As far as "The greedy deserve whatever happens

  • Disclosure: I own Helium hotspots and tokens. I also think the reward schedule could have been designed differently to better support long-term growth of the network, and I envy the people who heard about it before I did. But I don't think the rewards schedule they used was entirely unreasonable.

    They justified the rewards schedule (halving every two years, with a monthly rewards target split monthly between the deployed hotspots based on their proof of coverage performance) because it resembled the rewa

    • How about being a licensed ham who actually knows how to deploy this stuff not able to frigging get a hotspot because a bunch of lamers hoarded them and asked 5000 dollars for one until it wasnt worth getting into.

      Screw those people. Should have had priority for those with callsigns.

      • "Sometimes the majority just means all the morons are on the same side."

        Goddamn, I'm going to print this out and frame it. Thank you.

  • Isnt Its executives got rich pretty much the statement of every company around... Long gone are the days of making good money at the top. Now its excess to the max regardless of the cost to the working or society

  • Me so shocked! Shocked shocked shocked!

    Now if you'll excuse me, I have some hot bids to place on some rare Beanie Babies.

    (Yes yes I know that Beanie Babies are physical assets that actually exist in the real world (unlike crypto) so all you hypersensitive crypto bros just calm the fuck down. Go jerk off to GullibleCoinExtreme or whatever the next big scam is, okay?)

  • Obviously. None of them care about you fools who think crypto is worth more than a dog shit in your hand.
  • .... just like all these scam "currencies". The perps mine out all the easy stuff, pump and then dump.
  • Which was to be expected. Always and absolutely always, under the loudest popular slogans, there is a thirst for enrichment. And this is at least! In this regard, I really like the NFT. On sites like https://artozo.com/marketplace... [artozo.com] you always know who will get your money and what percentage the site holds. NFT marketplaces in general do not hide their main goal, but at the same time, like all other companies, they bring their mission to the fore.

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