SEC accuses the creator of the HEX token of fraud

US exchange regulator sues Richard Hart over scam around his projects Hex, PulseChain and PulseX

The U.S. Securities and Exchange Commission (SEC) has charged serial crypto entrepreneur Richard Hart (also known as Richard Schuler) with securities and fraud violations. The regulator revealed the essence of the allegations in a press release.

Hart has raised over a billion dollars through his Hex, PulseChain, and PulseX projects, according to the SEC. At the same time, the entrepreneur was actually engaged in the sale of unregistered securities under the guise of tokens, according to the SEC. The commission also charged Hart and PulseChain with a $12 million scam. With the alleged amount, the entrepreneur bought various luxury goods, including sports cars, watches, and also, allegedly, the world's largest black diamond weighing 555 carats known as Enigma.

Hart was able to raise about 2.3 million ether (ETH) through the Hex project in less than a year. As the US exchange regulator notes, the entrepreneur promised to enrich HEX investors since 2018. In September 2021, against the background of the Bitcoin (BTC) rally, the HEX token really appreciated significantly. However, it has remained in a downward trend since then, according to CoinMarketCap. Also, the serial entrepreneur was able to raise hundreds of millions of dollars in PLS and PLSX tokens, which, according to the SEC, are also unregistered securities.

Amid the accusations, the HEX rate fell 30% to $0.006054. PLS quotes fell 41% to $0.00006063, while the PLSX token lost 45% in price, falling to $0.00001734, according to CoinMarketCap.

Then the official website of HEX directly promised investors to increase their investments "at a rate never seen before in history." According to Hart himself, the return on investment in HEX tokens could be up to 369% per annum.

In November 2022, the editors again reported issues around HEX, PulseChain and PulseX. It turned out that the SEC subpoenaed Richard Hart, the promoters of cryptocurrency projects, to give evidence under oath. At the same time, against the background of the news, the largest HEX news channel urged users on Telegram to use secret chats so that a third party could not get access to the correspondence. The Telegram channel HEX also posted a video on YouTube urging not to cooperate with the investigation.

At that time, Richard Hart did not directly comment on reports of the promoters being sued. Instead, he posted a tweet in which he reminded of the need to use encrypted chats with the function of self-destructing correspondence on a timer. Against the background of the SEC lawsuit, the serial entrepreneur again pretended that he did not see problems with projects.