SEC Faces Challenges in Serving Richard Schueler Lawsuit

Richard Schueler’s first court appearance has been postponed from November 28, 2023, to January 30, 2024. The Securities and Exchange Commission (SEC) is currently having trouble serving Richard Schueler.

Peggy Kuo, Magistrate Judge, is overseeing the case for the Eastern District of New York and made the decision to postpone the teleconference.

Richard Schueler, also known as Richard Heart, has operated three crypto-asset offerings, including Hex, PulseChain, and PulseX. Heart is a 43-year-old US citizen believed to live in Helsinki, Finland, as per the reports presented by the SEC.

Background of the Case

In July 2023, the SEC charged Richard Heart with various claims. It includes raising more than $1 Billion in three unregistered crypto asset offerings and defrauding investors with $12.1 Million to buy luxuries, including a 555-carat black diamond.

The SEC filed a complaint in Brooklyn Federal Court, stating that Richard Schueler has attempted to sell his Hex token, PulseX asset trading platform, and PulseChain asset network on YouTube and other websites as pathways to grandiose wealth with the purpose of alluring users.

Apart from this, he was charged for inflatable impossible returns to boost sales of his tokens. Additionally, he was accused of using investor’s funds on luxuries, including McLaren and Ferrari sports cars, four Rolex watches, and The Enigma. All these collectively cost 3.16 Million British pounds, equivalent to $4.28 Million then.

He has violated the registration provisions of Section 5 of the Securities Act of 1933. The complaint also alleges that Heart and PulseChain violated the antifraud provisions of federal securities laws. 

The complaint seeks injunctive relief, repayment of ill-gotten gains plus prepossession interest, penalties, and other equitable relief. 

Challenges and Recent Developments 

As per the latest reports presented by the US SEC, it has been unsuccessful after multiple attempts to persuade Richard Heart to appear in court for his lawsuits.

As of yet, the Commission has not received confirmation from defendants in Finland to appear in court. 

In August 2023, the SEC requested that the Ministry of Justice in Finland serve the lawsuit against Schueler, as he was believed to reside in Helsinki. The SEC has not received any word yet about Schueler having been served.

The teleconference for the hearing of the case was initially scheduled for November 28, 2023. 

The Commission states that it continues to make efforts to officially serve the lawsuit despite the challenges and will wait until the newly announced date of January 30, 2024. 

If it does not succeed in its attempts to serve Richard Heart, then the SEC will move to alternatives.

Alternate Ways to Proceed Case Against Richard Heart

No alternative methods to communicate are stated in the court filings as of now. But recently, the court has used various alternatives to serve Richard.

In July 2022, a judge in the United Kingdom approved the delivery of legal notices through blockchain using a non-fungible token (NFT). The delivery method will involve airdropping the lawsuit documents, in the form of an NFT, into a set of wallets. The same method is likely to be used in this case for communication purposes and to maintain loyalty.

Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.