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Richard Schueler, popularly known as Richard Heart, is facing a lawsuit alleging he raised over $1 billion in unregistered securities offerings across three projects and used investor funds for personal expenses.
The internet personality Richard Schueler, often identified as Richard Heart, is currently facing a lawsuit filed by the U.S. SEC. The charges are related to his projects — Hex, PulseChain, and PulseX, which are alleged to have raised over $1 billion via three different non-registered securities offerings, starting in 2019.
The lawsuit, filed on Monday, July 30, also accuses Heart of deceit. He allegedly exploited investors’ funds for his personal interests, misappropriating their capital to purchase luxury items for personal use. Heart had propagated the perception that these investments would pave the way for extraordinary financial returns, such as his assertion that Hex was crafted to be “the most rapidly appreciating asset known to humanity,” according to the SEC.
Richard Heart (@RichardHeartWin | $HEX) is sued by the SEC for securities fraud pic.twitter.com/pyiiAja8qO
— Summers (@SummersThings) July 31, 2023
Despite promising the projects were designed with the noble aim of supporting free speech, Heart fell short of mentioning that a substantial portion of PulseChain’s investor money was spent on personal luxuries.
Both PulseX and PulseChain, which launched on May 13, experienced a turbulent inception with issues related to high transaction fees, liquidity problems, and vulnerabilities to exploits. The tokens of these projects—HEX, PLS, and PLSX—witnessed a price decline after their launch.
This Richard Heart's alleged wallet, as per SEC allegations
— Conor (@jconorgrogan) July 31, 2023
It currently holds $35M in DAI and has sent $26.9M through Tornado Cash pic.twitter.com/Gnmug9MusB
In a surprising twist, the SEC has also alleged that Heart frequently alluded to federal securities laws in his YouTube live streams and other public communications. Nevertheless, he acknowledged that the success of his projects hinged heavily on his personal endeavors.
On his website and during a marathon seven-hour live stream on YouTube, Heart emphasized Hex’s potential for financial return, asserting that it was programmed to outperform Ethereum (ETH). Heart even claimed that this had started happening, as evidenced by Hex’s price increase in its early days.
As of now, Heart has not issued a comment regarding these allegations. Eric Werner, director of the SEC Forth Worth Regional Office, stated that the lawsuit aims to safeguard the investing public and make Heart answerable for his actions.