SEC Files Charges for Unregistered Securities Offering in Crypto Issuance by Hex, PulseX and PulseChain: Raised More than $1 Billion

The Securities and Exchange Commission (SEC) has filed charges for an unregistered securities offering involving crypto. According to the SEC, Richard Heart, also known as Richard Schueler, along with three separate firms, Hex, PulseX, and PulseChain, raised over $1 billion in an unregistered securities offering.

The SEC said that it also charged Heart and PulseChain for fraud regarding the misappropriation of $12 million or more as allegedly he used the funds to be cars, watches, and, apparently, the largest diamond in the world called “the Enigma.”

The SEC’s complaint claims that the defendant began marketing Hex in 2018 as the first high-yield “blockchain certificate of deposit.”

SEC: Heart and PulseChain defrauded investors by misappropriating at least $12.1 million of PulseChain investor funds. Instead of using these investor funds to develop and market the PulseChain network, or even to fulfill Heart’s explicit statement that invested funds supported “freedom of speech,” Heart and PulseChain used at least $12.1 million of investor funds for Heart’s personal luxury purchases, including a 555-carat diamond, expensive watches, and high-end automobiles Click to Tweet

Heart and Hex allegedly offered and sold Hex tokens collecting more than 2.3 million Ethereum (ETH), including”recycling” transactions that is said to have enabled Heart to gain control of more Hex tokens surreptitiously.

Between at July 2021 and March 2022, Heart allegedly orchestrated two more unregistered crypto offerings that each raised hundreds of millions of dollars.

The funds raised were supposed to support the development of PulseChain and a crypto trading marketplace. Two native tokens, PLS and PLSX, were involved.

The SEC adds that Heart also allegedly designed and marketed a so-called “staking” feature for Hex tokens, which he claimed would deliver returns as high as 38 percent. The complaint further alleges that Heart attempted to evade securities laws by calling on investors to “sacrifice” their crypto assets in exchange for PLS and PLSX tokens.

The SEC”s complaint has been filed in the US District Court for the Eastern District of New York, seeking injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, penalties, and other equitable relief.



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