Richard Heart, the founder of the cryptocurrency HEX, was arrested on July 31, 2023, by the Securities and Exchange Commission (SEC) on charges of fraud and unregistered securities offerings.
Heart, who also goes by the online alias Richard Schueler, is alleged to have raised more than $1 billion through three unregistered offerings of HEX tokens. The SEC claims that Heart used these funds to purchase luxury goods for himself, including a 555-carat black diamond known as “The Enigma.” Heart is known for his extravagant lifestyle and his willingness to flaunt his excessive wealth. He would often post pictures of himself on social media wearing expensive clothes, jewelry, and watches. He also owned a fleet of luxury cars, including a Bugatti Chiron and a Rolls-Royce Phantom.
Heart’s flaunting of his wealth was seen by some as a way to boost the price of HEX. He would often claim that HEX was the “most secure and profitable blockchain in history,” and he would say that it was only going to go up in value. By showing off his wealth, Heart was trying to convince people that he was a successful investor who knew what he was talking about.
However, Heart’s extravagant lifestyle also raised some eyebrows. Some people questioned whether he was actually using the money he raised from HEX investors to develop the project, or if he was just pocketing it for himself.
Heart is also accused of making false and misleading statements about HEX to investors. For example, he allegedly claimed that HEX would be the “most secure and profitable blockchain in history” and that it would “generate more interest than Bitcoin.”
The SEC’s charges against Heart are a significant development in the ongoing crackdown on cryptocurrency fraud. The SEC has been increasingly aggressive in pursuing cases against cryptocurrency projects that it believes have violated securities laws.
Heart is not the first cryptocurrency founder to be arrested by the SEC. In 2018, the SEC charged the founders of the cryptocurrency BitConnect with fraud. The BitConnect founders allegedly raised more than $2 billion from investors through an unregistered securities offering.
The arrest of Richard Heart is a reminder that the SEC is taking cryptocurrency fraud seriously. Investors should be cautious when investing in any cryptocurrency project, and they should do their research to make sure that the project is legitimate.
References:
SEC Charges Hex Founder Richard Heart with Misappropriating Millions of Dollars of Investor Funds: https://www.sec.gov/news/press-release/2023-143
Richard Heart Arrested by SEC on Fraud Charges: https://decrypt.co/150677/sec-charges-hex-founder-richard-heart-1b-unregistered-securities-offering
HEX Crypto – Crunchbase Company Profile & Funding: https://www.crunchbase.com/organization/bitcoinhex
