Crypto influencer Richard Heart, also known as Richard Schueler, has been charged with fraud by the US Securities and Exchange Commission (SEC) for misappropriating approximately $12 million in investor funds. Heart allegedly used the proceeds from his offerings to purchase luxury items, including sports cars, watches, and a massive black diamond known as ‘The Enigma.’
The SEC has accused Heart and his three crypto securities—Hex, PulseChain, and PulseX—of conducting unregistered offerings and raising over $1 billion in crypto assets from investors. Heart encouraged investors to buy crypto asset securities in unregistered offerings and then deceived them by spending their assets on extravagant luxury goods.
Eric Werner, the Director of the Fort Worth Regional Office, stated, This action seeks to protect the investing public and hold Heart accountable for his actions. The SEC’s complaint reveals that Heart began marketing Hex in 2018, claiming it was the first high-yield blockchain certificate of deposit and promoting it as an investment that could make people wealthy.
Between July 2021 and March 2022, Heart organized two additional unregistered offerings that raised hundreds of millions of dollars in crypto assets. He also developed and promoted a staking feature for Hex tokens, promising returns as high as 38 percent.
According to the SEC’s allegations, Heart accepted more than 2.3 million Ethereum, valued at around $678 million, in exchange for Hex tokens. However, he never disclosed that he used millions of dollars of PulseChain investor funds to indulge in personal luxury purchases.
Among the extravagant items allegedly purchased by Heart were a $534,916 McLaren sports car, a $314,125 Ferrari Roma, and a $1.38 million Rolex watch. In February 2022, he supposedly spent $5 million of investors’ assets to acquire ‘The Enigma,’ a massive black diamond.
The charges against Heart highlight the need for investor protection and accountability in the cryptocurrency industry. It serves as a reminder for potential investors to conduct thorough due diligence and exercise caution when participating in crypto offerings.
The SEC’s pursuit of legal action against Heart demonstrates their commitment to safeguarding the investing public and ensuring individuals are held responsible for fraudulent activities. As the case unfolds, it will be interesting to see how the legal system addresses such allegations and how it will impact the future of the crypto industry.
It is essential for regulators, investors, and industry participants to work together to create a transparent and secure environment for cryptocurrency investments, free from fraudulent practices. By doing so, the potential of blockchain technology and its applications can be harnessed for the benefit of all stakeholders.
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