A man has been charged by the SEC for misappropriating millions of dollars invested by people who believed they would become ‘rich’ from cryptocurrencies.
Richard Heart, also known as Richard Schueler, and three entities he controls are accused of selling unregistered securities, namely crypto assets that raised $1 billion from investors who were told claiming it was the first high-yield “blockchain certificate of deposit.”
The SEC says that Heart began promoting Hex tokens as an investment designed to make people “rich” in 2018. Using his companies, Hex, PulseChain, and PulseX, Heart is alleged to have attracted investment from investors, including those who owned other cryptos who were encouraged to “sacrifice” them (rather than “invest”) to receive Hex tokens.
It was claimed that investors could expect returns of up to 38%.
Heart did not register the securities and, it is further alleged, he and PulseX used around $12 million of the funds invested to buy luxury goods, including sports cars, watches, and a 555-carat black diamond known as ‘The Enigma’ – reportedly the largest black diamond in the world.
“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,” said Eric Werner, Director of the Fort Worth Regional Office. “This action seeks to protect the investing public and hold Heart accountable for his actions.”
The SEC’s complaint has been filed in the U.S. District Court for the Eastern District of New York and investors in Hex, PulseChain, or PulseX are urged to submit a tip via the SEC’s website.
“Today’s actions send a clear message that even the biggest financial institutions are not above the law,” said Treasury Secretary Scott Bessent.
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