SEC or U.S. Securities and Exchange Commission cracks down on Richard Heart, Hex, and PulseChain. The authorities filed a lawsuit for operating three unregistered securities with fraudulent intentions by raising over $1 billion.
This is a riveting legal showdown as the Securities and Exchange Commission (SEC) files a historic lawsuit against renowned entrepreneur Richard Schueler aka Richard Heart, his decentralized cryptocurrency Hex, and the highly anticipated PulseChain project.
Allegations of these unregistered securities offerings and fraudulent activities have sent shockwaves throughout the industry, promising a saga that will shape the future of digital finance.
Hex, PulseChain, and PulseX were accused of violating Section 5 of the Securities Act of 1933’s registration requirements in the SEC’s complaint, which was submitted to the U.S. District Court for the Eastern District of New York in this SEC press release.
Heart presently resides in Finland but was born in the US. Since 2017, he has run a YouTube channel where he advertises his own cryptocurrency goods. This includes the three offerings: Hex token and its sibling product PulseChain, which uses the PulseX protocol.
“Today we charged Richard Heart (aka Richard Schueler) and three unincorporated entities that he controls, Hex, PulseChain, and PulseX, with conducting unregistered offerings of crypto asset securities that raised more than $1 billion in crypto assets from investors.”
Sec government tweeted.
Heart and PulseChain are accused of breaking federal securities laws’ anti-fraud provisions in the complaint as well. In addition to other equitable remedies, the complaint asks for injunctive relief, disgorgement of ill-gotten gains, as well as prejudgment interest and penalties.
In 2018, Heart allegedly started selling Hex on the pretense that it was the first high-yield “blockchain certificate of deposit,” and started hawking Hex tokens as an investment that would make people “rich.” Heart and Hex allegedly offered and sold Hex tokens in an unregistered offering from at least December 2019 to November 2020, earning more than 2.3 million Ethereum (ETH), including through so-called “recycling” transactions that allowed Heart to covertly acquire more Hex tokens.
Attorney Jason Seibert comments on Twitter: HEX case
In a recent Twitter Space debate, lawyer Jason Seibert addressed worries regarding Heart’s cryptocurrency offering. Seibert emphasized that in Tone Vays’ 2019 Bitcoin Law Review, he had previously drawn attention to the dubious nature of Heart’s assertions that HEX was not a securities offering. Heart denied that HEX was a security and had called it a certificate of deposit.
“Why it took this long for the SEC to care about HEX is one question, but the real question is how Heart really thought he could get away with it?”
Jason Seibet tweeted: