Harmony Clients Aren’t Happy with Post-Hack Plans

Not long ago, Harmony – a crypto exchange based in northern California – was the victim of a cyberattack that ultimately resulted in more than $100 million in digital currency funds being stolen.

Harmony Is Looking to Give People Their Money Back

The company has taken several measures to get its money back and make the situation better for its clients. Among the proposals it has made is this latest one in which executives want to issue nearly five billion new crypto tokens to any customers that may have lost money or suffered at the hands of the cyberthieves, though individuals are not reacting well to this news.

The idea amongst many reactors is that by minting more coins, the price of the asset is going to fall into the toilet. Several are pointing out that the company doesn’t appear to be learning any lessons from the U.S. government as of late, which seemingly thinks that printing more money is the answer to everything. In truth, this has only caused the value of USD to shrink, and the country is now suffering from record-high inflation.

Many traders are worried that Harmony, by issuing more tokens, will do more harm than good, and they’ve taken to social media to voice their concerns. One investor explained in an online message:

It boggles my mind that not only do we lose money, [but] we also pay for the reimbursement ourselves via inflation. You guys have no shame to call this a ‘reimbursement proposal.’

A few weeks ago, Harmony offered two proposals on its website for customers to consider. The first – known as Simple Rules Co. – involved fully reimbursing any losses to customers by minting close to five billion new tokens over a three-year period. This would involve doling out roughly 138 million new coins each month.

The second scenario would involve issuing close to 2.5 billion new tokens over three years, with about 69 million tokens being created each month. The real problem with both plans is that the coins being issued would be given a value of about two cents each, which is what they’d be worth right about now

The price ultimately wouldn’t change during the three-year issuance period regardless of what occurred in the crypto space, meaning that if the industry showed great promise, while the coins would naturally rise in price, investors probably wouldn’t see many returns as the price would remain stationary.

Neither Plan Seems Solid According to Investors

Harmony explained on its site:

Our community is a critical component to Harmony’s success. The Harmony team has worked tirelessly to brainstorm and develop paths towards reimbursing those who were impacted by the recent hack.

A further investigation into the event suggests it may have occurred at the hands of hackers in North Korea, a country that’s constantly sought to steal crypto funds for its nuclear program.

Tags: crypto hack, Harmony, North Korea