More Than A Quarter Of Helium Tokens Mined By Executives, Their Families And Friends: Report

Helium, dubbed as one of the most successful crypto startups, is in hot waters after Forbes reported the $1.2 billion firm's executives and their family members and friends were able to mine more than a quarter of all HNT.

After reviewing multiple internal documents and interviewing former employees at the Web3 startup, the outlet reportedly found that as many as 30 digital wallets that seem to be connected to Helium employees, their friends and family minted around 3.5 million HNT in the first three months of the startup.

Insiders at Helium, which is backed by Andreessen Horowitz and Tiger Global and recently confirmed its plans to launch Helium Mobile, allegedly generated enormous wealth during the initial days of the project. At their peak price, the mined HNT tokens were valued at $250 million. But with the 2022 crash, they are now worth around $21 million.

Helium created two tokens, the Helium Security Tokens (HST) and the Helium Network Tokens (HNT). One-third of the former belonged to the insiders. Interestingly, the outlet pointed out that the insiders also capitalized on the tokens meant for public use, which are HNT.

Basically, Helium nodes are run by users who are rewarded with HNT, which is then burned to drive the revenue of the Web3 firm. Each node raked in 33,000 HNT in 2019 instead of 2 HNT per month in the current bearish period. The insiders also took advantage of flaws in the models to gain access to more tokens and get richer.

Forbes' report came out three days after the Helium network confirmed that it is transferring to the Solana blockchain instead of its own due to "provide several benefits to the Helium Network including more HNT available to subDAO reward pools, more consistent mining, more reliable data transfer, more utility for HNT and subDAO tokens and more ecosystem support."

International Business Times reached out to Helium on Twitter and is awaiting a response.