Here’s how HEX’s Richard Heart beat SEC fraud charges

Richard Heart, the controversial founder of HEX, is claiming total victory over the US SEC after years of court battles.

On April 21, the SEC said that it would not amend and refile its fraud case against the former child actor and crypto evangelist. A court had dismissed the SEC’s fraud charges against Heart on Feb. 28.

Heart announced on X that HEX had obtained a victory very few crypto projects could boast: “Richard Heart, PulseChain, PulseX, and HEX have defeated the SEC completely and have achieved regulatory clarity that nearly no other coins have.”

HEX may be out of hot water with American securities regulators (for now), but Heart still faces charges in Europe, where he is wanted both for alleged tax fraud and for alleged assault on a minor.

*Richard Heart, real name Richard James Schueler, is still on Interpol’s wanted list. Source:* *Interpol*

SEC claimed Heart used HEX to defraud investors

In July 2023, the SEC filed a complaint against Heart, whose real name is Richard James Schueler, along with HEX, HEX’s layer-1 blockchain project, PulseChain, and the decentralized exchange (DEX) for the PulseChain network, PulseX.

The SEC made a number of allegations, including securities fraud and securities registration violations. It asked the court to bar Heart and his projects from participating in any sort of crypto asset security offering and to give up “all ill-gotten gains received as a result of the violations alleged.”

The complaint noted Heart’s repeated claims that HEX could offer incredible rewards to make investors rich. It also wrote that Heart spent over $12 million of proceeds from HEX offerings on luxury goods such as watches, sports cars and a 555-carat diamond ring.

Indeed, Heart is no stranger to the finer things in life. His celebrity is in part due to his frequent displays of wealth. In one video on X, he flaunted Louis Vuitton cases filled with dozens of luxury watches that he said were worth 9 million euros.

*Richard Heart wears four Rolex watches. Source:* *Luxury Bazaar*

Heart’s court case came down to jurisdiction. Last year, his legal team filed a motion to dismiss the case on the grounds that the SEC failed to show that any activities had occurred within the United States.

The SEC protested the motion. Ultimately, US District Judge Carol Bagley Amon agreed with Heart (the HEX founder does not live in the US), and she ruled that the statements regarding HEX’s price were targeted to a global audience — not US investors.

“The alleged misappropriation occurred through digital wallets and crypto asset platforms, none of which were alleged to have any connection with the United States,” Amon stated.

Finnish authorities want Heart on tax and assault charges

Heart claims that this legal victory provides new ground on which the crypto industry can thrive, creating a legal precedent that supposedly makes HEX safer to work with than any other crypto project.

Heart and HEX may not face American securities regulators, but he is still in hot water with Finnish authorities over alleged tax evasion and assault.

In September 2024, Finnish media wrote that Heart, who was reportedly residing in Helsinki, was remanded into custody in absentia. Finnish investigators, at the request of the country’s tax authorities, were investigating Heart and reportedly found that Heart’s income reporting did not match the tax service’s estimates.

Helsinki police detective Harri Saaristol said, “Based on the very considerable amount of money in question and the long-term and planned nature of the activity, there are grounds to suspect gross tax evasion.”

Related: Interpol issues ‘Red Notice’ for Hex founder Richard Heart

In the course of their investigation, Finnish police seized millions of euros worth of luxury watches from a residence in the city of Espoo near Helsinki.

Europol also stated that Heart (referred to as Schueler in the report) is wanted for assaulting a minor. “Schueler physically assaulted a 16-year-old victim by grabbing their hair, dragging them into the stairwell and knocking them to the ground.”

The allegations together have earned him a profile on Europol and Interpol’s most wanted criminal lists. Investigations are ongoing.

How long can HEX keep it up?

It seems Heart dodged US regulation because the SEC lacked jurisdiction rather than evidence. So, how long can he keep HEX going?

Industry observers and analysts have long claimed that HEX was a new form of Ponzi scheme, namely due to the promises of a whopping 38% annual percentage yield, larger profits for onboarding new users and the fact that Heart owned some 90% of HEX tokens.

Despite a number of committed acolytes on social media, the token seems all but dead. HEX’s price pumped briefly on news of the SEC dismissal. Zooming out, it’s barely moved since Heart’s legal troubles with the SEC began.

At publishing time, HEX’s price is $0.002253; 24-hour transaction volumes barely top $250,000.