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HEX Founder Richard Heart Managing to Evade SEC Lawsuit After Billion Dollar Securities Fraud

Last Updated November 27, 2023 12:22 PM
Josh Adams
Last Updated November 27, 2023 12:22 PM
Key Takeaways
  • Richard Heart is the founder of multiple crypto businesses.
  • In July, the SEC charged him with breaking securities laws and defrauding investors.
  • In the time, Heart has continued to post on X.

The founder of three major cryptocurrency platforms is proving difficult for authorities to hold accountable for alleged illegal token offerings totaling over $1 billion. Richard J. Schueler, publicly known as Richard Heart, is the subject of a federal complaint filed on July 31st by the Securities and Exchange Commission. 

The SEC accuses Heart and his unincorporated entities HEX, PulseChain, and PulseX of defrauding investors in the U.S. and globally through unregistered securities offerings over several years. However, properly serving the elusive crypto mogul formal notice of the charges has been an ongoing challenge spanning months.

Allegations of Fraud and Misappropriation

The July complaint  alleges that since December 2019, Heart executed fraudulent schemes related to Hex, PulseChain, and PulseX tokens. The SEC claims Heart touted the investments as pathways to fabulous wealth, at one point marketing Hex as “built to be the highest appreciating asset that has ever existed in the history of man.” 

However, Heart allegedly failed to register any of the offerings with regulatory authorities. The SEC also asserts that Heart and his PulseChain entity misled investors by misappropriating at least $12.1 million of funds raised from PulseChain’s 2021-2022 token sale. 

Rather than utilizing the money for network development as implied, Heart reportedly funneled millions into purchasing luxury vehicles, watches, and even a massive 555-carat black diamond. The SEC aims to prove Heart repeatedly violated antifraud provisions and securities registration requirements across all three token projects.

A Founder Who Can’t Be Found

On August 22nd, over three weeks after filing suit in a New York federal court, the SEC submitted a formal request under an international treaty to Finnish government officials for assistance serving notice to Heart at his known Helsinki area residence.

However, as of  November 21, the Commission had still not received confirmation from Finnish authorities that court documents were properly delivered, according to a court filing . Lacking proof Heart served under the treaty’s official process, the SEC notified the court of its dilemma. 

The Commission will report on the status of service efforts by December 15, 2023. If service remains uncompleted, the SEC plans to pursue alternative service under Rule 4(f) of the Federal Rules of Civil Procedure . The rule empowers the SEC to alternative methods to advance legal proceedings, including diplomatic channels and other methods sanctioned by international agreements.

Richard Heart: Eccentric?

In the time since the SEC first charged Heart, the founder has remained active on X (formerly Twitter). In posts  over the last several weeks, Heart has rallied against censorship , championed Bitcoin, and wished that more people “knew their constitutional rights and fought for them”. Heart currently disallows replies to his X posts.

The founder also has a notable habit of referring to himself in the third person.

In a biography on his official website, Heart describes himself as having been born into a disadvantaged family in a low-income neighborhood, facing challenges such as enduring taunts for using free lunch vouchers and navigating the difficulties of being a racial minority. (Heart is visibly Caucasian-looking).

Heart also describes hardships, his early work experiences, and alcohol and drug addiction among colleagues. Alongside this, Heart also includes a video of him installing a bidet  for his mother.

Richard Heart did not immediately respond to a request for comment.

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