In its
latest crackdown on crypto exchanges in the United States, the Securities and
Exchange Commission (SEC) has charged Hex’s Founder, Richard Heart, also known as
Richard Schueler, with raising over $1 billion through ‘unregistered offerings
of crypto asset securities’. The US securities watchdog filed the charges in a
district court in New York.
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.
— U.S. Securities and Exchange Commission (@SECGov) July 31, 2023
According
to the SEC, Heart raised the funds through Hex, which is an entity
he marketed as offering the first high-yield ‘blockchain certificate of
deposit’, starting in 2018. He also allegedly obtained the funds for the
development of PulseChain, a supposed crypto asset network, and PulseX, the
network’s crypto asset trading platform.
SEC claimed
that all three firms are unincorporated entities controlled by Heart. Through
the entities, the Hex Founder allegedly offered investors the exchange of their
digital assets for PLS and PLSX, the native tokens of
PulseChain and PulseX.
“From at
least December 2019 through November 2020, Heart and Hex allegedly offered and
sold Hex tokens in an unregistered offering, collecting more than 2.3 million
Ethereum (ETH), including through so-called ‘recycling’ transactions that
enabled Heart to surreptitiously gain control of more Hex tokens,” SEC
explained in a statement. “The complaint also alleges that, between at
least July 2021 and March 2022, Heart orchestrated two additional unregistered
crypto asset security offerings that each raised hundreds of millions of
dollars more in crypto assets.”
Furthermore, SEC claimed that Heart and PulseChain misappropriated at least $12
million of investor funds. Heart allegedly spent the amount on luxury items such as sports, cars, and watches.
He also purchased “a 555-carat black diamond known as ‘The Enigma’ – reportedly
the largest black diamond in the world,” the financial markets supervisor
added.
Additionally, SEC maintained that Heart
designed and promoted a
so-called ‘staking’ feature for…
