Summary:
• The US Securities and Exchange Commission (SEC) has filed a lawsuit against Richard Schueler, popularly known as Richard Heart, for allegedly engaging in unregistered securities sales and fraudulent activities.
• According to the complaint, Heart marketed Hex as the “first high-yield Blockchain Certificate of Deposit” on the Ethereum network which could give investors an annual return of 38% in more HEX tokens.
• The SEC also alleged that Heart used investors’ money to purchase luxury items such as the world’s largest polished black diamond.
SEC Sues Crypto Entrepreneur Richard Heart
The US Securities and Exchange Commission (SEC) has filed a lawsuit against controversial crypto entrepreneur Richard Schueler, popularly known within the crypto community as Richard Heart, along with three of his entities – Hex, PulseChain, and PulseX – for allegedly engaging in unregistered securities sales and fraudulent activities.
Alleged Unregistered Securities Sale
According to the complaint filed by the SEC on Monday (July 31, 2023), Richard Heart conducted an unregistered sale of cryptocurrency securities that raised more than $1 billion. In several YouTube live streams, he talked about Hex staking program which he claimed could give investors an annual return of 38% in more HEX tokens.
Investors’ Money Used For Luxury Purchases
The SEC further alleged that instead of using funds raised from investors to develop his project(s), he used them to purchase luxury items such as jewelry and art pieces including a luxurious black diamond worth millions of dollars.
SEC’s Claims Against Crypto Entrepreneur
In its complaint against Richard Heart, the SEC is claiming violations of Section 17(a)(1) & (3) of the Securities Act; Section 10(b) & Rule 10b-5 under Act; Section 15(a)(1) of Exchange Act; Section 206(4), 206(4)-8 & 206(4)-10 under Advisers Act; Sections 5 & 17(a)(2) under Investment Company Act; and Sections 13(d), 16(a), 16A & 18 under Exchange Act.
Consequences Of Alleged Fraudulent Activities
Should certain violations be proven by evidence presented during trial or accepted by way of settlement with Mr.Heart or any other involved party/parties then remedies may include permanent injunction barring defendant from future violations, disgorgement plus prejudgment interest, civil penalties and rescission offers may also be included depending upon case specifics.
