The Securities and Exchange Commission (SEC) has accused Richard Schueler, also known as Richard Heart, of committing fraud by deceiving investors and embezzling millions of dollars through his cryptoasset called Hex. According to the SEC, Schueler managed to raise over $1 billion through the unregistered sale of crypto securities and then used a substantial portion of the funds to indulge in a lavish lifestyle, including the purchase of high-end watches, real estate, and jewels.
The SEC's investigation revealed that Schueler operated three crypto-asset offerings: Hex, PulseChain, and PulseX, and he promoted these investments as a means to achieve immense wealth. The Hex tokens, marketed as an ethereum-based "Certificate of Deposit," were allegedly used as a facade to cover up an intricate fraudulent scheme. The promised annual return of 38% was said to be fictitious.
In the civil court, Schueler is facing three charges of securities fraud. The SEC claims that he deceptively manipulated trading activities on his platforms to create a false impression of high trading volume and demand for Hex tokens. This tricked investors into believing that the cryptoasset had significant value.
The SEC further alleges that Schueler misappropriated at least $12 million of investor funds to splurge on extravagant purchases, which included a massive 555-carat black diamond, luxury vehicles, and several high-priced Rolex watches. Among his notable watch acquisitions were a $550,000 Rolex Daytona, an $800,000 Rolex GMT Master II, and an unspecified $1.38 million Rolex watch.
Recently, in an attempt to downplay his extravagant lifestyle, Schueler reduced his presence on social media by deactivating his Instagram profile.
These charges against Schueler were formally filed in the Eastern District of New York.
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