A crypto promoter and online content creator has been charged with defrauding investors through unregistered offerings that reportedly raised more than US$1 billion.
The U.S. Securities and Exchange Commission (SEC) charged Richard Schueler (aka Richard Heart), the U.S.-born, Helsinki-based founder of three crypto firms — Hex, PulseChain and PulseX — with allegedly conducting unregistered securities offerings that raised over US$1 billion from investors around the world.
Heart and PulseChain were also charged with fraud for allegedly misappropriating at least US$12 million of investors’ money for personal use.
The allegations have not been proven.
“Heart continually touted these investments as a pathway to grandiose wealth for investors, claiming that Hex, for example, ‘was built to be the highest appreciating asset that has ever existed in the history of man,'” the SEC said in its complaint.
The SEC also alleged Heart was familiar with the test for determining what is considered a security, and what isn’t — and that he sought to skirt that test by calling for investors to “sacrifice” rather than “invest” in the crypto assets.
“But his efforts to obfuscate are unavailing,” the SEC said in its complaint, alleging that all of the offerings meet the definition of securities offerings.
“Although Heart claimed these investments were for the vague purpose of supporting free speech, he did not disclose that he used millions of dollars of PulseChain investor funds to buy luxury goods for himself,” it also said.
The regulator is seeking penalties, disgorgement and injunctive relief against Heart and his companies.