In a major development, the US Securities and Exchange Commission (SEC) has filed a fraud lawsuit against prominent crypto influencer Richard Heart, also known as Richard Schueler.
The lawsuit alleges that Heart raised over $1 billion through the unregistered offer and sale of crypto asset securities, including Hex, PulseChain, and PulseX.
The SEC contends that the crypto assets Hex, PulseChain, and PulseX should be classified as securities. Richard Heart allegedly promoted these investments as avenues to extraordinary wealth, boasting that Hex was designed to become the most appreciating asset in the history of mankind.
The complaint further accuses Heart and PulseChain of defrauding investors by misappropriating a substantial sum of $12.1 million from PulseChain investor funds.
Shockingly, these funds were allegedly used to finance lavish personal expenses, such as a 555-carat diamond, luxury cars, and high-end watches.
The SEC alleges that Heart concealed the transfer of $217 million in investor assets to a private wallet, using a so-called decentralized aggregator and a Mixer to cover up his misappropriation for personal use.
Heart’s extravagant purchases, including Ferraris, McLarens, and multiple Rolex watches, were reportedly financed with the funds he purportedly mixed.
The lawsuit also targets Heart’s Hex staking program, which he claimed would benefit token holders by reducing the supply and driving upward pressure on Hex’s price.
However, the SEC notes that Hex tokens and the offering were not registered with the agency.
Eric Werner, Director of the Fort Worth Regional Office, expressed the SEC’s stance on the matter, stating, “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.”
Heart has been charged with fraud in connection with the sale of a security, fraud in offering the sale of a security, and securities registration violations, according to court documents.
