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Regulation & Policy · 1 min read

SEC Charges Hex Founder Richard Heart with Fraud and $1 Billion Unregistered Offerings

The regulator alleges Richard Schueler misappropriated at least $12 million in investor assets for luxury purchases while conducting unregistered sales of HEX, PLS, and PLSX.

Editorial oversight: Julian Mercer, Chief Editor
Bearish
$ETH $2,358 −6.2%

At a glance Enforcement action

What happened
The SEC charged Richard Heart, Hex, PulseChain, and PulseX with unregistered offerings raising over $1 billion and misappropriating $12 million.
Why it matters
The complaint challenges key yield and 'sacrifice' funding mechanisms used by alternative crypto networks as unlawful securities sales.
Who is affected
Richard Heart, Hex, PulseChain, PulseX, and investors holding HEX, PLS, or PLSX tokens.
What's next
Litigation in the US District Court for the Eastern District of New York led by the SEC's trial counsel.
Primary source
sec.gov: SEC Charges Hex Founder Richard Heart with Misappropriating Millions of Dollars of Investor Funds from Unregistered Crypto Asset Securities Offerings that Raised more than $1 Billion

Key points

  • The SEC filed fraud and unregistered securities offering charges against Richard Heart, Hex, PulseChain, and PulseX over $1 billion raised.
  • Regulators allege Heart misappropriated at least $12 million in offering funds to buy sports cars, watches, and a 555-carat black diamond.
  • The complaint targets unregistered token offerings of HEX, PLS, and PLSX, alleging attempts to bypass securities laws via 'sacrifice' schemes.

The US Securities and Exchange Commission charged Richard Schueler, known online as Richard Heart, and three unincorporated entities he controls—Hex, PulseChain, and PulseX—with conducting unregistered crypto asset securities offerings that raised more than $1 billion 1. The civil enforcement action, filed in the US District Court for the Eastern District of New York, also charges Heart and PulseChain with fraud for allegedly misappropriating at least $12 million in investor proceeds 1. At the time of writing, broader markets traded lower, with $ETH down 5.3% over the prior 24 hours at $2,369.

According to the SEC complaint, Heart marketed $HEX starting in 2018 as a high-yield "blockchain certificate of deposit" intended to make purchasers wealthy, promoting a staking feature promising returns up to 38% 1. Between December 2019 and November 2020, Heart and Hex allegedly gathered more than 2.3 million Ethereum tokens through unregistered sales, utilizing "recycling" transactions to quietly consolidate Heart's control over the asset supply 1. The regulator further alleges that between July 2021 and March 2022, Heart held two additional unregistered offerings for $PLS and $PLSX, raising hundreds of millions of dollars by instructing participants to "sacrifice" rather than invest funds to evade federal securities laws 1.

Luxury Misappropriation and Enforcement Demands

The commission alleges Heart redirected at least $12 million of investor funds toward personal luxury items rather than protocol development 1. Specified purchases cited in the complaint include sports cars, high-end watches, and a 555-carat black diamond known as "The Enigma" 1. Eric Werner, Director of the SEC's Fort Worth Regional Office, stated that Heart failed to register the securities offerings and defrauded buyers by diverting their assets toward exorbitant spending 1.

The complaint alleges violations of Section 5 registration provisions by Heart, Hex, PulseChain, and PulseX, alongside antifraud violations by Heart and PulseChain under federal securities statutes 1. The regulator seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil monetary penalties, and additional equitable remedies 1.

Questions this story raises

What specific charges has the SEC filed against Richard Heart?
The SEC charged Richard Heart with conducting unregistered offerings of crypto asset securities in Hex, PulseChain, and PulseX, as well as fraud for misappropriating at least $12 million in funds.
What did Richard Heart allegedly purchase with investor funds?
According to the SEC, Heart spent offering proceeds on sports cars, luxury watches, and a 555-carat black diamond called 'The Enigma'.
What relief is the SEC seeking in court?
The agency seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil financial penalties, and other equitable remedies.

Sources

  1. [1] SEC Charges Hex Founder Richard Heart with Misappropriating Millions of Dollars of Investor Funds from Unregistered Crypto Asset Securities Offerings that Raised more than $1 Billion — sec.gov, October 15, 2026

Written by Basis Desk's newsroom system from the primary sources above and machine-verified against them before publication. Market figures marked "at the time of writing" come from live exchange data. Report an error: corrections@basisdesk.news · corrections policy.

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