SEC sues Richard Heart, founder of Hex, for raising $1 billion by offering unregistered securities

The Securities and Exchange Commission (SEC) continued its crypto crackdown in Q3 but decided to go after an influencer and entrepeuner over a company. Interestingly, the lawsuit filing came hours after reports of Coinbase CEO, Brian Armstrong, claiming that the SEC stated to them that, except for Bitcoin, every crypto asset is a Security.

SEC charges Richard Heart for violating Securities laws

The SEC sued the popular crypto content creator, Richard Heart, founder of Hex and Pulsechain, on Monday. Per the reported filing, the crypto advocate has violated Securities laws by raising $1 billion through unregistered offers and the sale of crypto assets.

According to the SEC lawsuit, Heart seems to have engaged in three separate offerings – Hex, PulseChain and PulseX. According to SEC, each of them is a crypto asset security created and managed by Richard Heart.

SEC filing against Richard Heart

Additionally, the SEC also stated in the filing that Heart seemingly inflated the value of “securities” sold to retail investors. The filing noted,

“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.

Furthermore, the SEC charged Heart and PulseChain with fraud for misappropriating at least $12 million of offering proceeds to purchase luxury goods.

Since the filing was announced, HEX price has fallen by nearly 11%, bringing the decline in the last three days to 20.36%. 

HEX/USD 1-day chart

The SEC announced the Hex lawsuit hours after reports of an interesting statement from the regulatory body surfaced. According to the CEO of Coinbase, Brian Armstrong, the SEC told Coinbase to halt the trading of all crypto assets except for Bitcoin prior to suing them. In an interview with Financial Times, Armstrong stated,

“They came back to us, and they said . . . we believe every asset other than Bitcoin is a security. And, we said, well how are you coming to that conclusion, because that’s not our interpretation of the law. And they said, we’re not going to explain it to you, you need to delist every asset other than Bitcoin.

Thus, by the looks of it, the SEC is potentially set to pursue any and every crypto asset and company it can, except for those associated with Bitcoin, in the ruse of violation of securities laws since they claim all crypto assets apart from BTC is security.