Many members of the HBAR community, have made significant investments in the HBAR cryptocurrency, mainly due to the trust in it being governed by multi-national enterprises such as Google, Boeing, IBM and 27 other multi-national enterprises. This trust is at risk if the suggested Action Plan or similar measures are not implemented.

Many HBAR investors purchased HBAR at prices close to 60 cents per unit.

Unfortunately, instead of seeing the investments grow or even maintain their value, we have witnessed a significant and continued depreciation of the asset. If this were due to the volatile nature of cryptocurrency only, it would not be a concern. 

The cryptocurrency market recovered significantly over the last year, whilst HBAR is valued at about 20% less than what it was worth in February 2023. In comparison, Solana’s value increased by about 1400% since then.

(The following are not our words, but the words of people who responded to this post on X, either publicly, or via private messages to protect their identity. - https://twitter.com/Zetagammaphi/status/1756522729656979912

After conducting research with open source intelligence methods and tools, the depreciation is not due to market volatility alone, but also potentially due to actions that were taken by Hedera Hashgraph LLC., governed by 30 multi-national enterprises with a cumulative revenue of close to 1 trillion dollars, Swirlds, Swirlds Labs, The Hashgraph Association, The Hasghraph Group and The HBAR Foundation. 

These entities, affiliated individuals and / or ultimate beneficiary owners have inflated the circulating supply of HBAR via token releases & sales, approved by the governing council directly, or indirectly whilst also reducing the native value of the asset itself by significantly cutting down staking rewards.

A lot of this has been done through allocations to different potentially interdependent entities that are presented legally as sovereign entities.

However, the CEO of the HBAR Foundation, a large beneficiary of these allocations recently publicly reminded the CMO of a major digital asset marketplace on the Hedera Network called ‘SentX’ that he does not like companies ‘double dipping’ and receiving grants from both The Hashgraph Association and The HBAR Foundation:

‘’Good project and glad you are a part of the Hedera ecosystem. This is why we, the @HBAR_foundation gave @SentX_io a grant in October 2023. We want to be good stewards of HBAR (all foundations); therefore, we collectively try to ensure a project who has received grant funding from one foundation doesn’t go to a different foundation in the Hedera ecosystem asking for additional funding. We call this double-dipping’’ - Shayne Higdon on X

Shayne Higdon also stated in his yearly review that the Hedera network revenue has increased 10x in one year, yet these transactions have mainly been generated by the platform atma.io, run by Avery Denison, one of the 30 MNEs running Hedera Hashgraph LLC.. According to many members of the Hedera community & sr. executives of ecosystem companies, most of these transactions have allegedly been funded by The HBAR Foundation itself. Can a network fund its revenue itself and call it revenue?

There have also been massive executive compensations via HBAR or potentially HBAR tokens that have been converted to US Dollars, as has been brought to my attention by one of the earliest Hedera investors.

For reference, members of the Board, the Governing Council’s different committees, and transaction signers of Hedera Hashgraph LLC.  are paid up to $250,000 a year. To make it clear, these are not full-time engagements. Only some compensations are publicly visible on

 https://help.hedera.com/hc/en-us/articles/5196502252573-Board-Compensation-at-Hedera

The cumulative compensation of these individuals and 30 MNEs is not public, yet based on calculation, it should be significantly more than the Hedera Network’s revenue. The network revenue that many believe is fully generated by HBAR given to Avery Denison by The HBAR Foundation and indirectly the governors of Hedera Hashgraph LLC., which also includes Avery Denison. 

There have been billions of dollars worth of HBAR given to these grant-giving organizations and very recently, another 4.86 billion units of HBAR have been allocated to The HBAR Foundation and Hashgraph Association, worth almost 400 Million USD. Are there no other entities qualified to grow the Hedera network and become grant-giving organizations? Have these two entities shown so much success that they should be given this amount of HBAR to ultimately directly or indirectly sell on the public market through grantees?

There have also been cases of Hedera Governing Council Representatives switching roles between different entities such as the current Australian Payments Plus representative who switched roles between different governing council member companies and grant-giving organizations. 

All these entities have often pointed out Hedera’s focus on the enterprise and according to the community, ignored the retail market, while the retail market has been absorbing all of the selling pressure on the HBAR market driven by these entities. 

These entities also market Hedera to retail to attract liquidity. For instance, they paid to put NFTs created on the Hedera Network on Times Square, whilst many of those projects ended up going nowhere and just as recently as two weeks ago, they started promoting meme coins in a public ‘X Spaces’ audio chatroom organised and hosted by the HBAR Foundation.

For reference, a major CEO of one of the most important organizations in the Hedera ecosystem claims that The HBAR Foundation has been selling 35 Million USD worth of HBAR every month. I have not personally verified this, yet this person is one of the most important people in this ecosystem and is vital to Hedera’s biggest partnerships. This begs the question of how much more HBAR is being sold every month?

Moreover, tokens allocated for project funding have not increased the value of HBAR, but rather contributed to significant sell pressure and dilution. This lack of transparency and disregard for investors' interests is unacceptable. Many of the projects that have received very big grants have not delivered anything or only some insignificant product. Oddly, many major, critical ecosystem companies are failing to survive and maintain critical infrastructure, often forced to integrate competitor networks to survive.

Another issue is that Hedera has been promoted to be used by the governing council, yet barely any of them are using it for anything. At least it is not known by the public.

We are calling on these entities to take immediate action: increase transparency in their decision-making processes; halt further depreciation by stopping inflationary practices through different shell entities; take steps towards increasing the value of the asset; reconsider token allocations; limit executive compensations via HBAR and reconsider the incentive mechanisms to reflect the interests of HBAR investors; cease all other measures that decrease HBAR value.

Recently, a massive payment in HBAR, was made to one of the Governing Council members to purchase the intellectual property rights to the Hashgraph algorithm and to open-source it. 

Our investments should be protected – not devalued through questionable practices. We demand accountability from those who manage this cryptocurrency network on behalf of its investors. Please sign this petition if you believe in fair treatment for all investors.

Potential legal risks due to these statements made by the Hedera community

The things described in the passage present several legal risks and potential violations according to ChatGPT, we would like to stress that these are AI-generated assumptions based on statements collected from the HBAR community, sr. executives of Hedera affiliated organisation, early investors and people building on Hedera. These cannot be taken as legal advice or legal statements and are purely here to demostrate what AI thinks of this:

 

Securities Laws: Selling investments based on false or misleading information, or failing to disclose material information, could violate securities laws. Investors may have a claim under securities laws if they were not provided with accurate information about the risks associated with their investments in HBAR. The acceleration in token releases could potentially be assumed as such.

Fraud and Misrepresentation: If the entities involved knowingly made false statements or material omissions about the value or prospects of HBAR, they could be liable for fraud or misrepresentation. A 10-fold revenue increase announcement funded by the entities themselves could amount to that, yet this is not factually verified at this point and is based on statements.

Antitrust Laws (e.g., Sherman Act): The coordinated actions of Hedera Hashgraph LLC, its affiliates, and other associated entities to control the supply and price of HBAR could potentially violate antitrust laws. This includes any agreements or actions that restrict competition or harm consumer welfare. The accumulation and distribution of HBAR among affiliated entities could raise concerns about 
monopolistic practices.

Market Manipulation: Artificially inflating the circulating supply of HBAR and reducing staking rewards to depress its value could be considered market manipulation, which is illegal under securities laws.

Insider Trading: If executives or insiders had knowledge of material non-public information and used it to their advantage in buying or selling HBAR, they could be liable for insider trading violations. Currently, there is no evidence of that but it would be great to have a public account of the wallets of executives and insiders for the sake of transparency.

Fiduciary Duty: Executives and board members have a fiduciary duty to act in the best interests of shareholders. If they prioritize their own interests or the interests of affiliated entities over those of HBAR investors, they could be in breach of their fiduciary duty.

Consumer Protection Laws: Misleading marketing or failure to deliver on promises made to investors could violate consumer protection laws.

Even if HBAR were classified as a utility token rather than a security, there are still legal risks and potential violations associated with the actions described in the passage:

Fraud and Misrepresentation: Regardless of whether HBAR is considered a security or a utility token, providing false or misleading information to investors about its value or prospects could still constitute fraud or misrepresentation.

Consumer Protection Laws: Misleading marketing practices or failure to deliver on promises made to investors could still violate consumer protection laws, regardless of the token's classification.

Antitrust Laws (e.g., Sherman Act): Actions that restrict competition or harm consumer welfare, such as controlling the supply and price of HBAR, could still potentially violate antitrust laws even if HBAR is considered a utility token.

Market Manipulation: Artificially inflating the circulating supply of HBAR and reducing staking rewards to depress its value could still be considered market manipulation, regardless of the token's classification.

Fiduciary Duty: Executives and board members still have a fiduciary duty to 
act in the best interests of shareholders or token holders. Breaching this duty by prioritizing their own interests or the interests of affiliated entities over those of HBAR investors could still lead to legal consequences.

Intellectual Property Laws: The purchase of intellectual property rights and subsequent open-sourcing of the Hashgraph algorithm could still raise legal issues, given the influence of the selling party

Overall, while the legal framework and regulatory requirements may differ depending on whether HBAR is classified as a security or a utility token, many of the actions described in the passage could still potentially violate various laws and regulations, and investors may still have legal avenues to pursue accountability and protection of their interests.

The 30 multinational companies on the Hedera Governing Council face several legal risks due to their involvement in the actions described in the passage:

Antitrust Violations: If these companies are found to be colluding or engaging in anti-competitive behavior through their involvement in setting the policies and practices of the Hedera network, they could be in violation of antitrust laws. 

Any agreements or actions that restrict competition or harm consumer welfare could lead to antitrust scrutiny and potential legal consequences.

Fiduciary Duty Breach: If executives or representatives of these multinational companies serving on the Hedera Governing Council breach their fiduciary duties to act in the best interests of the network and its stakeholders, they could face legal repercussions. This includes prioritizing the interests of their own companies or affiliated entities over those of HBAR investors.

Securities Law Liability: If these companies are found to have made material misstatements or omissions about the value or prospects of HBAR, or if they engaged in market manipulation activities, they could face liability under securities laws. Even if HBAR is considered a utility token, providing false or misleading information to investors could still constitute fraud or misrepresentation.

Consumer Protection Laws: Engaging in misleading marketing practices or failing to deliver on promises made to investors could violate consumer protection laws. This could include misrepresenting the benefits or risks associated with investing in HBAR or the Hedera network.

Compensation practices:

Executive Compensation Scrutiny: If it's found that executives or representatives of these multinational companies on the Hedera Governing Council are receiving excessive compensation or benefits at the expense of HBAR investors, they could face legal scrutiny. Shareholders or token holders may challenge such compensation arrangements as being unfair or not aligned with shareholder interests.

Fiduciary Duty Breach: If executives or representatives of these companies on the Hedera Governing Council are involved in setting their own compensation levels or approving compensation packages that are not in the best interests of the network and its stakeholders, they could be in breach of their fiduciary duties. This could lead to legal consequences and shareholder or token holder lawsuits.

Collusion Concerns: If executives or representatives of these multinational companies on the Hedera Governing Council are found to be colluding to set compensation levels or engage in other anti-competitive behavior, they could face legal repercussions. Collusion to fix prices or allocate resources could violate antitrust laws and lead to significant penalties and legal liabilities for the companies involved.

 

Overall, the multinational companies on the Hedera Governing Council could face significant legal risks if their actions are found to violate antitrust laws, fiduciary duties, securities laws, or consumer protection laws. These companies need to ensure compliance with relevant laws and regulations to mitigate these risks and protect their interests as well as those of HBAR investors.

 

Action Plan - Our request as consumers / retail HBAR investors to restore the value of HBAR immediately

1. Immediately cease all activities that can knowingly hurt the price of HBAR.

2. Immediately create a contingency plan to increase the price of HBAR.

3. All governing council members are to be forced to implement the Hedera network in a minimum 3000 transaction per second throughput use case, OR buy 1.5 Billion HBAR from the public market.

4. If 3. cannot be achieved within 6 months, the governing council members should leave the governing council or be given another 6 months to purchase 2.5 Billion HBAR or implement the Hedera network in a minimum 4000 transaction per second throughput use case.

5. If 3. and 4. are not implemented by a Governing Council member, they should be forced to leave the council or issue a public letter of commitment to the Hedera network and explain their inaction.

6. All governing council meetings are to be conducted in public live streams

7. All members of the governing council, Hedera Hashgraph LLC. and all affiliated entities mentioned above to publicly declare all their HBAR holdings and transaction for the future and the past 4 years.

8. Publicly acknowledge the importance of retail investors, retail-oriented projects and make decisions with retail as a key stakeholder, not only consumer

9. Clear and full transparency of every single HBAR given as grants by ANY entity

10. A permanent democratically elected community representative on the governing council who must present all relevant interests and concerns of the community promptly through a direct democracy mechanism that enables the community to voice their concerns in real-time and upvote their biggest concerns.

11. Any compensation or salary that is paid through the conversion of HBAR at any point in time should be publicly known.

12. If any governing council member buys HBAR following Action Plan Item 3 and/or 4, they are not allowed to sell it and can only use it to pay transaction fees.

13. Clear and transparent overview of all HBAR sold, bought and held by any affiliated entity

The health of the Hedera network is the biggest priority of the HBAR community, however, the HBAR community must have their interests protected and consumer protection should not be ignored by multi-national enterprises.

 

The author of this petition is ColdAI LLC. based in Delaware. It is merely translating the comments made by the Hedera community on X in response to https://twitter.com/Zetagammaphi/status/1756522729656979912 and using ChatGPT by OpenAI to understand the legal side of some of these statements. ColdAI LLC. does not accuse any party of any wrongdoings and this petition is merely representing statements made by the Hedera community to improve the health of the Hedera network and the HBAR cryptocurrency. This petition is an expression of opinion and advocacy protected by freedom of speech rights. The creator of this petition is exercising the constitutional right to petition for redress of grievances. The information presented in this petition is based on available responses of the Hedera community and constitutes the opinion of them. The creator of this petition is merely a messenger and shall not be held liable for the content of the petition or any actions taken as a result of its dissemination. The petition is provided for informational purposes only.

ALL PARTIES THAT SIGN THIS PETITION DO NOT DISMISS THEIR LEGAL RIGHTS IN ANY SHAPE OR FORM. HOWEVER, IF A GOVERNING COUNCIL MEMBER IMPLEMENTS ACTION PLAN ITEMS 3 & 4, THE SIGNEES OF THIS PETITION WILL HAVE NO LEGAL CLAIMS AGAINST THOSE GOVERNING COUNCIL MEMBERS.