• The U.S. Securities and Exchange Commission (SEC) has sued crypto entrepreneur Richard Schueler, popularly known as Richard Heart, and his three entities for allegedly engaging in unregistered securities sales and fraudulent activities.
• The SEC claims that Heart conducted an unregistered sale of cryptocurrency securities that raised more than $1 billion, which he then used to purchase luxury items including the world’s largest polished black diamond.
• According to the complaint, Heart marketed Hex as a high-yield Blockchain Certificate of Deposit on the Ethereum network with potential investors being promised an annual return of 38% in more HEX tokens.
SEC Files Lawsuit Against Crypto Entrepreneur Richard Heart
The US Securities and Exchange Commission (SEC) has filed a lawsuit against controversial crypto entrepreneur Richard Schueler – popularly known within the crypto community as Richard Heart – along with three entities under his control. The regulator alleges that they have engaged in unregistered securities sales and fraudulent activities amounting to over $1 billion USD.
Allegations of Unregistered Securities Sales
The complaint from the SEC states that Heart conducted an unregistered sale of cryptocurrency securities raising over $1 billion USD which he then used to create a luxurious lifestyle for himself by buying expensive items such as the world’s largest polished black diamond. The regulator also refers to several YouTube live streams where he talked about Hex staking program promising investors an annual return of 38% in more HEX tokens.
Further Allegations From SEC
The regulator further accused Heart of using investor funds for personal expenses, including payments for a luxury car lease and other personal expenditures unrelated to Hex or its public offering; paying certain individuals who assisted him with recruiting new investors; funding various business ventures; making payments related to his tax liabilities; and transferring funds into accounts controlled by him personally at various banks around the world.
Accusations Of Fraudulent Activities
In addition, the SEC alleged that Heart encouraged investors to “sacrifice” their original investments by converting them into another form of investment called HEX token while falsely claiming it would be profitable for them in order to benefit himself financially without disclosing this fact beforehand. Furthermore, he is accused of making false statements regarding incentives offered during initial coin offerings (ICOs) and failing to disclose conflicts of interest when recommending investments made through his entities PulseChain LLC and PulseX LLC.
Conclusion
The SEC is seeking permanent injunctions against all defendants involved along with disgorgement plus interest, civil penalties, restitution if applicable, and other relief deemed appropriate by the court.