Hex founder Richard Schueler has become the latest target of the U.S. Securities and Exchange Commission (SEC). Otherwise known online as Richard Heart, the crypto influencer has been sued along with his other projects, PulseChain and PulseX.
The regulatory watchdog claimed Heart to have raised over $1billion across three different unregistered securities offerings beginning in 2019. It also alleged that he defrauded his investors by using investor funds for personal goods.
The lawsuit further states that Heart “touted these investments as a pathway to grandiose wealth for investors”. He also claimed that Hex “was built to be the highest appreciating asset that has ever existed in the history of man”.
Even though he had said that these investments were for the vague purpose of supporting free speech, the lawsuit pointed out that Heart “did not disclose that he used millions of dollars of PulseChain investor funds to buy luxury goods for himself”.
As a founder of PulseChain, PulseX and the project Hex, Heart has been a central point for controversy ever since their launch, which happened earlier in July. Despite amassing considerable funds, his crowdfunded crypto platforms got disappointing results. They had been quite unstable since inception as it struggled with high fees, liquidity issues and exploitable bugs.
A few days into launch, there were also rumours of Heart disowning his three projects as many pointed out that he had removed Hex, PulseChain, and PulseX from his Twitter bio.
Late last year, the SEC also issued a subpoena to Hex influencers. In its recent lawsuit against Heart, it also mentioned that the influencer has previously made comments suggesting that Hex will increase in value.
The suit further charged that: “Heart pumped Hex’s capacity for investment gain, claiming at Hex.com (until at least November 1, 2020) that ‘Hex is designed to surpass ETH, which did 10,000x price in 2.5 years. It’s working! So far, HEX’s USD price went up 115x in 129 days.’”
In a 2019 seven-hour livestream on YouTube, he also stated that Hex “was built to outperform Ethereum and Bitcoin and all other cryptocurrencies”. This was just hours before the Hex offering commenced.
Post the launch, the prices of the $HEX, $PLS and $PLSX tokens fell considerably. According to the SEC, the tokens of his two projects are “practically worthless”, meanwhile the price of $HEX is down 98.4% from its all-time high.
In defrauding investors by misappropriating at least $12million of customer funds, the regulatory watchdog held that Heart was using them for personal purchases of luxury items instead of developing the protocols.
At the time of press both $HEX and $PLS were down by almost 30% daily, trading at $0.0062 and $0.000065, respectively, as per CoinGecko. $PLSX on the other hand has fallen by over 40% in the last 24 hours, struggling to trade at $0.000020, at the time of writing.