METALLICUS EXPOSED A Comprehensive Investigation into Centralization, Financial Misconduct, and a Systematic Pattern of Retail Investor Harm Compiled from public court records, on-chain evidence, and community disclosures Metallicus, Inc. — the San Francisco-based company behind Metal Pay, XPR Network (formerly Proton), LOAN, and the METAL blockchain — publicly presents itself as a decentralized, community-governed fintech innovator. Behind that polished narrative lies a thoroughly documented record: a centralized power structure that overrides its own community votes, a serial cycle of failed products propped up by token inflation, an SEC investigation, multiple civil lawsuits including one alleging customer funds were used to pay executive salaries of up to $1 million per year during a year of zero revenue, a hacked lending protocol, and a rewards pool that was promised to investors — and then secretly raided to fund payroll. Metallicus was co-founded by Marshall Hayner and Glenn Marien in 2016. Hayner, its CEO, has cultivated a public persona as a crypto pioneer. This document examines the ever-widening gap between that image and the documented reality. PART I: A Network in Name Only — The Illusion of Decentralization Decentralization is the foundational promise of blockchain technology. Metallicus has built its entire brand around that promise while constructing a system that operates as a private, centrally controlled enterprise — one that overrides community votes, expels dissenting validators, and retains sole custody of user assets. 1.1 Governance Theatre: One Token, One Vote — All Votes Go to Metallicus The XPR network uses a token-weighted governance model: 1 XPR equals 1 vote. The critical flaw is that Metallicus and its founders received the overwhelming majority of the XPR supply at no cost when the network launched. This concentration gives Metallicus effective veto power over every vote, regardless of how the broader investor community votes. Two cases make this undeniable: The Phoenix Proposal — Supply Doubling Against Community Will Marshall Hayner personally proposed doubling the total XPR supply from 10 billion tokens — a move that would cut every existing holder's stake in half and hand Metallicus a fresh supply of tokens to sell to fund operations. The community was overwhelmingly opposed. The proposal passed anyway, because Metallicus controlled the voting weight. Investors who bought in on the basis of a fixed supply had no recourse whatsoever. Consortium Pay Removal — A 942M vs 2.5M Landslide That Was Simply Ignored The community passed a proposal to eliminate Consortium pay — ongoing XPR distributions to block producers dominated by Metallicus affiliates — with 942.16 million XPR in favor versus just 2.58 million against. An overwhelming mandate. Metallicus, financially dependent on those distributions, refused to implement the result. The proposal was blocked and buried. Votes in this ecosystem are not governance — they are performance art staged to give investors a false sense of participation. 1.2 The Consortium: A Private Telegram Chat Masquerading as a Validator Network XPR's block producers — the nodes that validate transactions — operate under the label of "The Consortium." Admission to the Consortium is not determined by any on-chain mechanism or community vote. It is controlled entirely by a private Telegram group chat created and administered by Metallicus. Disagree with Metallicus, and you are not just removed from the chat — you are removed from the network entirely. This has happened to multiple block producers on record: • Proton Kiwi — ejected from the Consortium and the network after publicly disagreeing with Metallicus leadership. • Proton London — ejected from the Consortium and the network after publicly disagreeing with Metallicus leadership. A blockchain where a single private company decides unilaterally who may participate in securing it is not a decentralized network. It is a private database with a blockchain skin. The "Consortium" is a marketing term for a company-controlled whitelist. 1.3 Wrapped Asset Risk: Centralized Custody with No Independent Oversight XPR's "X Tokens" — wrapped versions of Bitcoin (XBTC), XRP (XXRP), and others — are held under the exclusive custody and control of Metallicus, a single centralized private company. There is no decentralized escrow, no smart-contract-based custody, no independent auditor verifying reserves, and no mechanism by which holders can independently verify that the underlying assets exist. If Metallicus becomes insolvent, is seized by regulators, or simply ceases operations, users holding X Tokens would have no independent legal claim on the underlying assets. Given the company's litigation history and reported SEC scrutiny, this is not a theoretical risk. 1.4 Mandatory Arbitration: The Fine Print That Kills Your Legal Rights Buried in Metallicus's Metal Pay Terms of Service is a mandatory arbitration clause that explicitly prohibits class action lawsuits . Users who agree to the Terms — required to use the platform — waive their right to join collective legal action against the company. This is a calculated legal shield designed to prevent the very kind of coordinated investor recourse that Metallicus's history most warrants. Individual arbitration is costly; class actions are not. Stripping users of the class action right is a deliberate strategy to make accountability prohibitively expensive for the people most harmed. PART II: The Repeating Playbook — Build Hype, Drain the Pool, Dump on Retail Every Metallicus product follows the same arc: a new narrative generates investor excitement, founders and insiders receive the majority of tokens at zero cost, the token supply is later inflated to fund operations, commitments made to retail investors are quietly broken, and the project is eventually abandoned in favor of the next initiative — leaving retail holders with devalued assets while the cycle repeats. This is not a pattern that emerged accidentally. It has repeated across every single product Metallicus has ever launched. 2.1 MTL / Metal Pay (2017): The ICO, the Broken Promise, and the Raided Reward Pool Metal Pay was Metallicus's first major product. In 2017, the company raised approximately $9.9 million through an Initial Coin Offering, selling 55 million MTL tokens at $0.18 each. The MTL whitepaper was explicit: 26,341,112 MTL tokens were specifically ring-fenced for the Proof-of-Processed-Payment (PoPP) rewards program — a core feature of the product that promised users they would earn MTL simply by making payments through the app. This was marketed heavily to investors and users as a fundamental and lasting feature of the platform. What happened to that 26.3 million MTL rewards pool? Community investigators and early investors have documented that Metallicus quietly dipped into it — using the ring-fenced investor rewards to fund company payroll and keep Metal Pay operational during periods of no revenue. By the time Metallicus officially "sunsetted" PoPP in October 2021, the pool was gone. In the announcement, the company retroactively reframed the entire program as an "experimental, fun way to distribute cryptocurrency" — erasing its prior characterization as a core, lasting product feature. Investors who purchased MTL partly on the basis of the PoPP reward mechanism received nothing from that pool. Metallicus received payroll. As with every subsequent product, the total MTL supply was also inflated — expanding from the original 66.6 million tokens to over 89 million — diluting ICO investors while generating additional tokens for the company to sell. MTL has been in long-term decline ever since. 2.2 Proton / XPR Network (2019): The Monthly Treasury-to-Payroll Drain As MTL stagnated, Metallicus launched the Proton blockchain — later rebranded as XPR Network. Existing Metal Pay users and MTL holders were encouraged to migrate, funneling a fresh wave of retail capital into a new token controlled, once again, predominantly by the founders. On-chain data has allowed community members to track a recurring pattern: in the period approaching each monthly payroll cycle, large sums of XPR were transferred from the publicly visible XPR treasury account ( @xprtreasury ) to the on-chain Metallicus payroll account ( @metalpayroll ), and subsequently liquidated to fund employee salaries. This predictable selling pressure consistently drove the XPR price down. When community members raised concerns, Hayner reportedly deflected criticism by blaming others — a pattern described by community observers as a deliberate strategy to distract from the structural cause of the price decline. The Phoenix Proposal to double the supply was the logical continuation of this pattern: when selling the existing treasury supply was no longer sufficient, simply mint more. 2.3 LOAN Protocol: Centralized Lending, Zero Governance, and a 2024 Hack Metallicus launched LOAN as a lending and borrowing platform, inviting comparisons to established DeFi protocols like Aave. The comparison is deliberately misleading. LOAN token holders have zero governance rights. All decisions are made exclusively by Metallicus. All deposited assets are held in custody by Metallicus — not audited smart contracts. It is not open-source. It is a centralized lending desk using DeFi branding for marketing purposes. In September 2024, the LOAN protocol was successfully exploited in a re-entrancy attack. An account identified as "letsgopuppy" executed a sophisticated exploit on the protocol's lending smart contract, draining wrapped assets before detection — including DOGE, LTC, XRP, BTC, and ETH. Metallicus was forced to halt all platform activity. The fact that a "decentralized" DeFi protocol required a centralized company to manually freeze operations in response to an attack only underscored what was already apparent: there is nothing decentralized about it. The hack also exposed the additional risk in Part III: according to the Krueger lawsuit, 8.7 billion LOAN tokens were allegedly misappropriated by Metallicus leadership from trust — tokens that were held on this same insecure platform. 2.4 METAL Blockchain: The Latest Reboot, Same Insider Structure The most recent Metallicus product is the METAL blockchain — a fork of Avalanche repositioned around a credit union narrative. As with every prior project, the largest METAL holders at launch are Metallicus and its founders, who received their tokens at no cost. Retail participants and any partner institutions acquire tokens at a structural disadvantage to insiders who already hold the majority supply — and who have a documented history of selling that supply to fund operations, regardless of the price impact on everyone else. The pattern is now in its fourth iteration: MTL, XPR, LOAN, and METAL. A new story, a new token, the same insider distribution, and the same retail investors absorbing the losses while the cycle begins again. PART III: The Legal Record — Courts, the SEC, and Documented Misconduct Metallicus and its founders are the subjects of multiple active civil lawsuits spanning fraud, trademark infringement, embezzlement, and whistleblower retaliation. The company has also reportedly been under active SEC investigation. What follows is drawn exclusively from public court filings and documented reports. 3.1 Donald Berk v. Metallicus, Inc. — Customer Funds Used for $1M Payroll Donald Berk is a banking veteran with over 25 years of experience at Northern Trust. Metallicus publicly celebrated his appointment first as COO, then — in June 2023 — his elevation to the Board of Directors, calling him an "indispensable linchpin" in the company's vision. Shortly afterward, he was fired. Berk filed suit in San Francisco Superior Court alleging wrongful termination, age discrimination, and whistleblower retaliation. The core allegation is stark: upon reviewing the company's internal coin balances, Berk identified a substantial discrepancy — a "hole" in the financial records that, in his professional assessment, reflected customer-held crypto tokens being misappropriated to fund company payroll . The lawsuit alleges that certain executives received salaries of up to $1 million per year during 2022 — a year in which Metallicus generated no meaningful revenue. When he raised these concerns internally, he was terminated. Berk's complaint further alleges that Metallicus was under active SEC investigation in 2024 — potentially for selling crypto tokens without a broker's license or for "double minting" : pledging the same tokens across multiple transactions simultaneously. The San Francisco Business Times described the lawsuit as alleging financial malfeasance at a crypto firm trusted by the Federal Reserve for fund transfers — a remarkable juxtaposition of institutional credibility and alleged insider misconduct. 3.2 Kliebert et al. v. Metallicus, Inc. — ICO Fraud at Necker Island This case originates from a 2017 blockchain conference held at Richard Branson's Necker Island, where attendees allege they were induced by Marshall Hayner and Metallicus to purchase MTL tokens based on material misrepresentations about their value and future prospects. The complaint asserts violations of the Texas Securities Act, deceptive trade practices, fraud, and negligent misrepresentation. The case survived early dismissal motions and remains an active part of the public litigation record. The conference setting — a luxury private island attended by high-profile names including Richard Branson — was itself part of the sales environment that lent the pitch an air of legitimacy it is alleged not to have warranted. 3.3 Proton AG v. Metallicus & Marshall Hayner — Trademark Infringement Proton AG — the company behind Proton Mail — brought a trademark infringement action after Metallicus named its blockchain "Proton," alleging consumer confusion and infringement of its well-established marks. Proton AG subsequently moved to add Marshall Hayner personally as a co-defendant, on the grounds that he personally authorized and oversaw the infringing activity. Metallicus did not oppose the motion — tacitly conceding Hayner's direct personal involvement. The dispute spawned parallel proceedings in the Northern District of California. 3.4 Krueger & SoftAtom v. Metallicus et al. — 8.7 Billion Tokens Allegedly Embezzled This case carries particular weight given the history behind it. Frederick Krueger was a genuine collaborator in Proton's founding: Hayner recruited him specifically because Krueger had built the Lynx blockchain and its successful wallet. Krueger brought his team, his codebase, and his community — and received the title of Co-Founder and Chairman of Proton Chain LLC. The @name account structure, the wallet technology, and key architectural elements of the Proton chain trace directly to Krueger and Lynx. Krueger and his company SoftAtom later alleged that approximately 8.7 billion LOAN tokens held in trust on their behalf were transferred out without authorization, without notice, and without any compensation. The complaint asserts conversion, embezzlement, breach of fiduciary duty, unjust enrichment, and violations of California Business Statutes. Named defendants are not limited to Metallicus as a company — the complaint names Marshall Hayner, Irina Berkon (CFO), and Syed Jafri individually , indicating that plaintiffs believe senior leadership was directly and personally involved in the alleged theft. The man who helped build the network had his tokens taken — and is suing the people he built it with. 3.5 Alexander Christian v. Metallicus, Inc. and Marshall Hayner An additional civil complaint was filed against Metallicus and Marshall Hayner personally in San Francisco County Superior Court in December 2020. The filing adds to the accumulating pattern of litigation targeting both the company and its CEO as an individual defendant — a distinction that matters, as it suggests plaintiffs across multiple cases believe Hayner's personal conduct, not merely corporate policy, is at the heart of the alleged harm. CONCLUSION: The Full Picture Taken individually, each element documented here might be rationalized as an isolated failure. Taken together, they form an unmistakable pattern. Metallicus raises money from retail investors through token offerings that promise decentralization, community governance, and lasting utility. Founders and insiders receive the majority of each token supply at no cost. The ring-fenced rewards promised to users are raided to fund payroll. When the token price declines under that selling pressure, the supply is expanded to generate more tokens to sell. When community votes produce results that threaten the company's cash flow, those votes are ignored. When insiders raise concerns about customer fund misappropriation, they are fired. When co-founders and partners object to having billions of tokens taken from trust without authorization, they are sued against. This cycle has played out with MTL, with XPR, with LOAN, and is underway with METAL. The names change. The narrative changes. The token ticker changes. The mechanism does not. Retail investors who have participated in any Metallicus product have, in aggregate, lost significant sums funding a company that was, according to its own former COO and Board Member, using their assets to pay executive salaries — in a year it generated no revenue. That same company is now marketing itself to credit unions and their depositors. The public record documented in this report is the context those institutions and their members deserve to have. Referenced Court Cases • Donald Berk v. Metallicus, Inc. — San Francisco County Superior Court, Case No. CGC-25-628277 • Kliebert et al. v. Metallicus, Inc. — S.D. Texas, Case No. 4:19-cv-02250 • Proton AG v. Metallicus, Inc. — N.D. California, Case No. 4:21-cv-09714 • Metallicus, Inc. v. Proton AG (Declaratory Judgment) — N.D. California, Case No. 4:21-cv-09562 • Frederick Krueger & SoftAtom, Inc. v. Metallicus Inc. et al. — Los Angeles County Superior Court, Filed March 16, 2022 • Alexander Christian v. Metallicus, Inc. et al. — San Francisco County Superior Court, Filed December 29, 2020