US SEC Sues Richard Heart for Selling Unregistered HEX Securities

In another emphatic crackdown move, the United States Securities and Exchange Commission (SEC) has filed a lawsuit against Richard Schueler aka Richard Heart, the founder of the HEX and PulseChain protocol for the sales of unregistered securities.

The SEC Case Against Heart

According to the markets regulator, Heart raised as much as $1 billion in the sale of tokens associated with PulseChain, PulseX, and Hex protocols since their existence. The market regulator claimed that all of the three tokens are considered unregistered asset security.

While the SEC found fault in the sales of these assets, the commission also accused the internet entrepreneur of constantly promoting these investments as a pathway to grandiose wealth for investors. The market regulator also found fault with Heart for offering a Staking product associated with these tokens which is capable of returning up to 38% to investors.

The SEC noted that these actions are unsafe for investors, thus justifying the charges being brought against the entrepreneur

“Heart called on investors to buy crypto asset securities in offerings that he failed to register. He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods,” said Eric Werner, Director of the Fort Worth Regional Office. “This action seeks to protect the investing public and hold Heart accountable for his actions.”

As a part of the Press Release, the SEC has called on the members of the HEX community to come forward with information should they have it.

The SEC vs HEX Lawsuit and Broader Impact

That the SEC is charging Richard Heart is not coming as a surprise to members of the crypto ecosystem as they are notably used to related enforcement actions which has been consistent all year round.

While HEX and the PulseChain ecosystems are relatively less popular compared to other Web3.0 projects that have been charged by the regulator, the impact of the lawsuit might still be felt across the board.

HEX token for instance is currently on a freefall following the lawsuit with its price tanking by 16.76% over the past 24 hours at the time of writing to $0.007372. HEX now joins the list of tokens like Cardano (ADA), Solana (SOL) and Filecoin (FIL) that are now tagged a security by the US SEC.

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on Twitter, Linkedin

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.