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2023-08-01 04:47:02The United States Securities and Exchange Commission (SEC) initiated a lawsuit against Richard Schueler, an internet marketer also known as Richard Heart, accusing him of unregistered securities offerings through his projects Hex, PulseChain, and PulseX. The SEC asserts that Heart amassed over $1 billion since 2019 through these offerings.
The SEC further alleges that Heart misappropriated investor funds for his personal expenditures. Despite Heart's persistent promotion of his projects as vehicles for substantial financial growth, with audacious claims such as Hex being engineered to be "the most rapidly appreciating asset in human history," the SEC argues that these ventures were, in fact, utilized to finance Heart's extravagant lifestyle without appropriate disclosure to investors.
Despite a turbulent launch marked by high fees, liquidity problems, and software vulnerabilities, PulseX and PulseChain were introduced earlier this month. Following their introduction, the prices of the associated HEX, PLS, and PLSX tokens experienced a significant downturn. The SEC further accuses Heart of recurrent references to federal securities laws in his public communications, such as YouTube livestreams, while concurrently admitting that the success of his projects hinged entirely on his personal efforts.
The SEC's lawsuit also mentions Heart's ambitious assertions about Hex's potential for investment return. For instance, Heart announced on Hex.com (until at least November 1, 2020) that Hex was projected to exceed the performance of ETH, which saw a 10,000x price increase in 2.5 years, and that Hex had already experienced a 115x price rise in 129 days. Furthermore, Heart asserted during a seven-hour YouTube livestream on December 2, 2019, mere hours before the Hex Offering began, that Hex was created to outperform Ethereum, Bitcoin, and all other cryptocurrencies.
The lawsuit levels accusations of fraud and securities registration violations against Heart and his projects.