FTX bankruptcy has created a ripple effect all over the crypto ecosystem. One of the known personality who is in limelight with the FTX news is Kevin O Leary , who also have some percentage of investments in Helium as per his own disclosure.
What is Helium and the risk associated with this ecosystem ?
“The Helium Network is a decentralized wireless Internet of Things (IoT) network using the LoRaWAN system, tied to the cryptocurrency Helium Network Token (HNT), founded by Amir Haleem who is in middle of controversy based on an article from Forbes.” People who bought Helium hotspots by paying exorbitant price and participated in the network obtained very small rewards for Proof of Coverage. Most of the users who decide to participate in Helium network will end up never seeing their initial investment back and reasons are discussed in this article.
Helium was initially considered as People’s network and the founder team used its users to expand with a promise to reward its miners with HNT token. Although Helium blockchain was never stable, Network increased exponentially while the spoofing and fraud inside the blockchain was never addressed and was a big deal. Founder team threw a blind eye to anyone who complained about fairness and founder himself blocked any users who asked question about how these fraud issues will be addressed. Helium foundation pushed updates by passing votes against the masses claiming the solutions will solve the problems which everyone knew was a false promise. Users kept complaining about the issue in Helium’s discord servers, reddit, twitter and even on youtube which can be seen as of this date.
As adoption increased , people ( without knowing the fraud part) bough their overpriced miners and ended up losing money over time. Amir’s Helium foundation also controlled who can distribute the hotspots which put a wait time of years for users who places their orders.
Voskcoin is one of well know and recognized miner/ Youtuber shows his frustration that he has been waiting for nearly 2 years for the miner’s which is not yet arrived. This is result of the bad decisions of Helium foundation on how they wanted to control and approve hardware. Instead of decentralized approach they wanted centralized control with lot of falsified promises about rewards. This means if a user ordered the Helium device during the peak of bull run, the user ended up paying the high fees for a worthless device which may or may not be of any user anymore due to Helium network expansion and issue.
False Statements claimed by Helium and its Founders :
- City of San Jose wanted to see if Helium can help distribute internet to low-income households but this ended in bad state and San Jose chose not to renew a pilot project with Helium when it failed to subsidize internet costs for low-income households through the mining of HNT. As part of this pilot , the city purchased 20 hotspots in 2021 noticed a significant decline of HNT generated per miner.
Clay Garner, Chief Innovation Officer for the Office of Mayor Sam Liccardo, told Forbes, attributing the drop to a lack of data being sent across the network. San Jose “can’t afford to work on things that are not scaling significantly,” Garner added. Haleem declined to comment.
Forbes
Helium rewards have dropped significantly and this has caused direct impact to anyone who bought and installed the device. Anyone who contributed rewards during the start of network benefited heavily while leaving the rest in the dust with false promise of rewards.
Users in the US wish SEC can interrogate such issues where a genuine misuse has taken place.
2. Helium claimed its mesh network used by Salesforce
Salesforce, whose logo appeared on Helium’s website right next to Lime’s, says that it also doesn’t use the technology. “Helium is not a Salesforce partner,”.
3. Helium claimed its mesh network used by Lime :
Helium advertises on its homepage that Lime, the mobility company behind those electric scooters and bikes, uses its crypto-powered mesh wireless network.
Details can be found in theVerge about Helium’s false claims on above point 2 & 3.
Helium overstated and falsified its business partnerships to gain more publicity and user confidence. This may attract SEC attention if this confirmed true.
Token Fair Launch Controversy Discovered
Helium was considered one of the most fair launch token as per the founder. However based on analysis of leaked documents by Forbes, Haleem family had minted thousands in rewards which equated to millions of USD at the time of analysis.
For example, a hotspot linked to Haleem’s wife displayed the coordinates of a California home the couple owned, according to a property records search. Five hotspots connected to this wallet mined 250,000 HNT in the first three months of the network’s inception, according to blockchain data. The wallet has earned a total 455,000 HNT from mining rewards, worth $25 million at HNT’s peak price, and $2 million today. It is unclear when or if Haleem sold those tokens; he declined to comment.
Forbes
With all these, Helium may face a steep uphill if SEC starts looking to this issue.
Kevin O Leary Invested in Helium
Shark Tank’s Kevin O Leary has been vocal about his investment in Helium at multiple occasions publicly. It’s not clear if he invested in their token or as a paid partnership. In either case, he is currently facing a lot of criticism for supporting alleged FTX founder SBF. Hopefully Helium is not one of those tokens which can get him in trouble again like FTX. With what have been discovered so far about Helium founder, this is not far fetched to get him in trouble.
Helium’s move to Solana – Solana is in the middle of hotsoup because of the FTX/Alamada debacle. Even after multiple criticism, founder of Helium decided to push towards Solana. Only time will tell how will this help long term and the founder is headbend on this decision. Apparently Helium’s move to Solana had pushed back from its own team members.
Bottom line, with all the falsified information from Helium founders with misleading facts and tons of network fraud issues on Helium network, will this be another FTX? This is a questions to be asked and anyone holding or planing to invest in Helium token as an investor must be warned. Investors have to do their due diligence before investing in this blockchain.
This is opinion piece of the author and may or may not reflect actual facts. Please do your own research and this is not an investment advice. This content is for educational purpose only. Not a financial advice
Image Credits: Unsplash
