The U.S. Securities and Exchange Commission has filed a lawsuit against Richard Schueler, better known as Richard Heart, along with his crypto-related entities Hex, Pulsechain, and Pulsex. According to the complaint, the regulator alleges that the defendants raised more than $1 billion through unregistered securities offerings and violated federal securities laws, including antifraud provisions.
SEC centers its case on unregistered token offerings
In the complaint, the SEC says Heart began offering and selling Hex tokens in December 2019. The regulator alleges that Hex was marketed to investors as a high-yield blockchain certificate of deposit and that buyers were encouraged with promises of incentives and bonuses. Between December 2019 and November 2020, the SEC says Heart accepted more than $678 million worth of ether from investors in exchange for Hex tokens.
The agency argues that these transactions amounted to securities offerings that should have been registered under U.S. law. In its view, the structure and promotion of the token sale brought Hex within the scope of securities regulation, making the lack of registration a core part of the case.
Pulsechain and Pulsex also drew hundreds of millions, SEC says
The SEC’s allegations extend beyond Hex. The complaint states that between July 2021 and April 2022, Heart conducted additional unregistered offerings tied to Pulsechain and Pulsex. According to the filing, investors were urged to deposit crypto assets into public wallet addresses in exchange for tokens that would be distributed at a later date.
The scale of those fundraising efforts was substantial, according to the regulator. The SEC says more than $354 million was invested in Pulsechain, while more than $676 million was raised for Pulsex using the same general method. Combined with the Hex-related fundraising described in the complaint, the case focuses on capital formation that the agency says exceeded the billion-dollar mark.
The SEC maintains that these offerings were securities offerings and should have been properly registered. By presenting the projects in this way, the agency is signaling that its enforcement theory covers not only the token sales themselves, but also the manner in which they were marketed, funded, and structured.
Alleged misuse of funds for luxury purchases
In addition to the registration claims, the SEC accuses Heart and Pulsechain of misleading investors and misappropriating funds. The complaint alleges that at least $12.1 million was diverted from money that investors had been led to believe would support development of the Pulsechain network.
Instead, according to the SEC, those funds were used for Heart’s personal luxury spending. The filing specifically references purchases that allegedly included a 555-carat diamond, luxury watches, and automobiles. These allegations form a key part of the fraud-related component of the case, as the regulator argues the money was not used in the way investors were told it would be.
Case heads toward trial as scrutiny of crypto fundraising intensifies
The SEC is seeking to bring the matter to trial. If the case proceeds, it could become another closely watched example of how U.S. regulators are applying securities law to token-based fundraising campaigns and project treasury management in the digital asset sector.
The lawsuit also underscores a broader regulatory theme: authorities are paying close attention not only to whether token issuers register offerings, but also to how they communicate with investors and how raised funds are ultimately spent. For market participants, the case adds to an expanding body of enforcement actions that continue to shape the legal boundaries of crypto fundraising in the United States.