The Securities and Exchange Commission (SEC) has officially filed charges against Richard Heart, the founder of Hex and PulseChain, for engaging in the unregistered sale of over $1 billion worth of crypto asset securities. Additionally, Heart is accused of stealing $12 million from these funds, which he used to purchase luxury goods.
Unregistered Securities Sale and Exchange
The SEC alleges that Heart conducted an unregistered securities sale by offering Hex tokens to investors. Furthermore, PulseX, a separate creation by Heart, is said to have operated as an unregistered securities exchange. PulseX featured a native token named PulseChain, which was also deemed an unregistered security.
Misappropriation of Investor Assets for Luxury Purchases
According to the complaint, between August 2021 and September 2022, Heart misappropriated at least $12.1 million from PulseChain investor assets. He utilized these funds to finance his lavish spending spree on luxury goods such as cars and watches.
Specifically, Heart is accused of splurging $534,916 on a McLaren sports car, $314,125 on a "white Ferrari Roma," and more than $1 million in total on three Rolex watches. Shockingly, he allegedly spent a staggering $4.28 million on the purchase of a 555-carat black diamond named "The Enigma," claiming it to be the largest black diamond in the world. What's even more concerning is that he made this purchase with misappropriated PulseChain investor assets.
Protecting Investors and Ensuring Accountability
Eric Werner, the Director of the SEC's Fort Worth Regional Office, stated, "Heart called on investors to buy crypto asset securities in offerings that he failed to register. He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods." This action by the SEC aims to safeguard the investing public and hold Richard Heart accountable for his actions.
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