{"id":381360,"date":"2023-12-12T20:20:39","date_gmt":"2023-12-12T20:20:39","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=381360"},"modified":"2023-12-12T20:18:41","modified_gmt":"2023-12-12T20:18:41","slug":"sec-informs-court-that-richard-heart-has-been-served","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/sec-informs-court-that-richard-heart-has-been-served\/","title":{"rendered":"SEC informs the court that Richard Heart has been served"},"content":{"rendered":"<div class=\"flex-1 overflow-hidden\">\n<div class=\"react-scroll-to-bottom--css-mcsga-79elbk h-full\">\n<div class=\"react-scroll-to-bottom--css-mcsga-1n7m0yu\">\n<div class=\"flex flex-col pb-9 text-sm\">\n<div class=\"w-full text-token-text-primary\" data-testid=\"conversation-turn-3\">\n<div class=\"px-4 py-2 justify-center text-base md:gap-6 m-auto\">\n<div class=\"flex flex-1 text-base mx-auto gap-3 md:px-5 lg:px-1 xl:px-5 md:max-w-3xl lg:max-w-[40rem] xl:max-w-[48rem] group final-completion\">\n<div class=\"relative flex w-full flex-col lg:w-[calc(100%-115px)] agent-turn\">\n<div class=\"flex-col gap-1 md:gap-3\">\n<div class=\"flex flex-grow flex-col max-w-full\">\n<div class=\"min-h-[20px] text-message flex flex-col items-start gap-3 whitespace-pre-wrap break-words [.text-message+&]:mt-5 overflow-x-auto\" data-message-author-role=\"assistant\" data-message-id=\"3c626a72-7238-43d4-a30e-319ff49984f7\">\n<div class=\"markdown prose w-full break-words dark:prose-invert dark\">\n<p><a href=\"https:\/\/cryptoslate.com\/people\/richard-heart\/\">Richard Heart<\/a>, founder of blockchain projects <a href=\"https:\/\/cryptoslate.com\/blockchain\/pulsechain\/\">PulseChain<\/a> and <a href=\"https:\/\/cryptoslate.com\/coins\/hex\/\">HEX<\/a>, was served with a lawsuit by the U.S. Securities and Exchange Commission (SEC) on Oct. 31 for alleged fraud and unregistered securities sales.<\/p>\n<p>In a Dec. 11 filing, the SEC detailed serving the lawsuit, adhering to Finnish law and the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents. Heart resides in Helsinki, Finland. Heart was charged by the SEC on July 31, 2023.<\/p>\n<p>The lawsuit accuses Heart, who operates under the entities Hex, PulseChain, and PulseX, of selling unregistered securities over a span of three years and misappropriating funds for personal use.<\/p>\n<h2>Fraud allegations<\/h2>\n<p>The SEC's initial complaint on July 31 <a href=\"https:\/\/cryptoslate.com\/sec-sues-hex-founder-richard-heart-for-alleged-fraud-and-unregistered-securities-sales\/\">alleged<\/a> that Heart defrauded investors and engaged in the unregistered sale of crypto securities through his entities. These entities, each with its native token, were collectively involved in raising over $1 billion.<\/p>\n<p>The SEC highlighted Heart's role as the controlling force behind these projects, promising investors substantial wealth. However, it is alleged that a portion of these funds, approximately $12 million, was diverted by Heart for personal luxury expenditures, including sports cars, watches, and a 555-carat black diamond named &#8220;The Enigma,&#8221; rebranded as the &#8220;HEX.com diamond.&#8221;<\/p>\n<p>Heart has <a href=\"https:\/\/cryptoslate.com\/richard-heart-addresses-sec\/\">publicly criticized the SEC<\/a>, claiming his efforts in the crypto industry have been more effective in protecting investors than the regulator's. According to a video clip that resurfaced from January\u2019s HexConference, Heart accused the SEC of attacking beneficial aspects of the crypto world and neglecting to address significant industry malpractices. He also argued that his projects, including HEX, PulseChain, and PulseX, should not be classified as securities under the Howey Test, emphasizing their decentralized nature and the lack of expectation of profit from their buyers.<\/p>\n<p>Heart launched HEX in December 2019 and <a href=\"https:\/\/cryptoslate.com\/richard-hearts-hex-token-raises-concerns-in-the-crypto-community\/\">quickly attracted scrutiny<\/a> from industry analysts and experts. Marketed as the first high-interest blockchain certificate of deposit, HEX was announced with the promise of unprecedented growth, claiming potential returns exceeding 10,000x within two and a half years. The project received an influx of over 33,000 ETH, equivalent to approximately $5 million at the time, in what was termed &#8220;donations&#8221; that were converted into HEX tokens.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Richard Heart, founder of blockchain projects PulseChain and HEX, was served with a lawsuit by the U.S. Securities and Exchange Commission (SEC) on Oct. 31 for alleged fraud and unregistered securities sales. In a Dec. 11 filing, the SEC detailed serving the lawsuit, adhering to Finnish law and the Hague Convention on the Service Abroad [&hellip;]<\/p>\n","protected":false},"author":1419,"featured_media":381389,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77968,60793],"tags":[77910,78571],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEC informs the court that Richard Heart has been served<\/title>\n<meta name=\"description\" content=\"HEX founder Richard Heart faces SEC allegations of defrauding investors and misappropriating funds for lavish personal spending.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/sec-informs-court-that-richard-heart-has-been-served\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEC informs the court that Richard Heart has been served\" \/>\n<meta property=\"og:description\" content=\"HEX founder Richard Heart faces SEC allegations of defrauding investors and misappropriating funds for lavish personal spending.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/sec-informs-court-that-richard-heart-has-been-served\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2023-12-12T20:20:39+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-12-12T20:18:41+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/12\/DALL\u00b7E-2023-12-12-14.12.49-A-hyperrealistic-close-up-image-focusing-on-the-hands-as-legal-papers-are-being-passed-from-a-Finnish-woman-process-server-to-a-man.-The-image-capture.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1792\" \/>\n\t<meta property=\"og:image:height\" content=\"1024\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jacob Oliver\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jacob Oliver\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/sec-informs-court-that-richard-heart-has-been-served\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/sec-informs-court-that-richard-heart-has-been-served\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/jacob-oliver\/#person\",\"name\":\"Jacob Oliver\",\"url\":\"https:\/\/cryptoslate.com\/author\/jacob-oliver\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/jacob-oliver\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/jacob-oliver\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/05\/jacob-oliver-editor-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/05\/jacob-oliver-editor-300x300.jpg\",\"caption\":\"Jacob Oliver\"},\"jobTitle\":\"Former Editor\",\"description\":\"Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. 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