During the first half of 2023, the Securities and Exchange Commission (SEC) launched a series of lawsuits against players in the crypto industry. Thus, after Coinbase and Binance, it is the turn of the Hex, PulseChain and Pulse X entities to be in the crosshairs of the American financial policeman. Richard Heart, founder of Hex, PulseChain and Pulse X finds himself at the heart of a series of accusations. Indeed, the SEC accuses him of having illicitly enriched himself via these entities by making unregistered offers of cryptoactive securities. In total, he would have diverted at least $ 12 million from the proceeds of these offers!
That year, Richard Heart set out to commercialize Hex, presenting this entity as the first high-yield "blockchain certificate of deposit". He promoted Hex tokens as an investment designed to enrich people. His main argument? A promise of returns of up to 38%: enough to attract a maximum of investors.
This strategy allowed him to sell, between December 2019 and November 2020, a maximum of Hex tokens as part of an unregistered offer. In return, Heart was able to collect more than 2.3 million Ethereum (ETH). He would even have taken the opportunity to "recycle" transactions and stealthily take control of a larger number of tokens. This news is by far the most scandalous.
According to the SEC investigation, the founder of Hex did not stop there. In 2021 and 2022, he orchestrated two new offers of unregistered cryptoassets that allowed him to raise hundreds of millions of additional dollars in cryptoassets. These funds were supposed to be used to support the development of an alleged crypto asset network, PulseChain, and an alleged crypto asset exchange platform, PulseX, through their native tokens, PLS and PLSX respectively.
In addition, Heart also allegedly tried to evade securities laws. Indeed, he called on investors to "sacrifice" their cryptos in exchange for PLS and PLX tokens. These different actions ended up attracting the attention of the SEC which filed a complaint against him.
So what do we blame Richard Heart for?
Faced with the actions of Richard Heart, the SEC filed a complaint with the United States District Court for the Eastern District of New York. It must be said that this complaint comes after almost five years of warnings from crypto analysts.
The SEC complaint alleges that Hex, PulseChain and PulseX violated the registration provisions of section 5 of the Securities Act of 1993. Also, according to this complaint, Heart and PulseChain violated the anti-fraud provisions of the federal securities laws.
As Eric Werner, the director of the Fort Worth regional office, asserts, Heart has not only called on investors to buy asset securities in offers that it has not registered. He would then have "defrauded these investors by spending part of the funds raised to buy exorbitant luxury goods"!
For example, through PulseChain, Heart allegedly embezzled more than $12 million of the proceeds from the offer for personal purchases. Among these purchases, we find sports cars, watches as well as a 555 carat black diamond known as "The Enigma". It would be the largest black diamond in the world!
Through its legal action, the SEC wishes to "protect the investing public" and "hold Heart accountable for its actions". As a result, she asked for an injunction, the restitution of the ill-gotten gains plus interest before judgment, penalties and other fair measures.
What is Heart's reaction to the accusations?
Faced with the accusations made against him, Richard Heart reacted in a rather controversial video. Indeed, he claimed that he was trying to make the world a better place and help people invest their money intelligently. For him, the real enemy is rather the American financial policeman, whose maneuvers he also finds more than questionable.
This attempt to prove his innocence, however, does not convince the crypto community. She even made an exciting discovery: Heart would actually have several identities that he uses as he sees fit. This detail does not work in his favor, but rather corroborates the SEC's version.
In short, the SEC has initiated legal proceedings against Richard Heart, founder of Hex, PulseChain and PulseX. He is accused of stealing millions of dollars of investor funds through his projects, then using them for his personal purchases. The case is being processed and is attracting a lot of interest from the crypto community.
The SEC case against Richard Heart transcends the simple financial scandal to become a mirror reflecting the challenges and dilemmas of the entire crypto industry. Accused of embezzling millions and violating several laws, Heart finds himself at the center of a legal battle that could well pave a new path for the regulation of cryptocurrencies. The survey lays bare the current gaps and vulnerabilities that remain in a still young sector, questioning trust and ethics in the crypto ecosystem. The upcoming judgment will not only concern Heart and its projects, but will be a judgment on the industry itself. Its outcome could become a precedent, influencing standards, policies, and maybe even the future of crypto. In a world where technology is evolving faster than the law, this case reminds everyone that integrity and transparency remain fundamental.
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