PulseX Involved in SEC’s Billion-Dollar Lawsuit
PulseX is at the center of a lawsuit by the Securities and Exchange Commission (SEC), which accuses Richard Heart of conducting three unregistered securities offerings, collectively raising over $1 billion. Filed shortly after Coinbase CEO Brian Armstrong’s remarks on the SEC’s classification of cryptocurrency assets—excluding Bitcoin—the lawsuit charges Heart with unregistered sales related to Hex, PulseChain (PLS), and PulseX (PSLX).
Find more details in our article.
The SEC filed the lawsuit on July 31, accusing Heart of marketing these tokens to investors as a way to amass substantial wealth. Heart is also accused of violating federal securities laws and defrauding investors globally by promising significant returns in exchange for hundreds of millions in deposits.
Between December 2019 and November 2020, Heart allegedly accepted over 2.3 million Ether (valued at $678 million) for Hex tokens. Additionally, he reportedly received $354 million for future PLS tokens and $676 million for future PLSX tokens.
The SEC claims that Heart and PulseChain misappropriated at least $12.1 million of investor funds for personal luxury purchases, including a 555-carat diamond, expensive watches, and high-end automobiles.
Read the full SEC statement here.
The SEC seeks permanent injunctive relief, disgorgement, prejudgment interest, and civil penalties against Heart and his projects. Heart, residing in Finland, has 21 days to respond to the complaint and avoid default judgment.
This SEC action is seen as a continuation of what critics label a “regulation by enforcement” strategy in the U.S. crypto space. The SEC is simultaneously handling cases against crypto exchanges Coinbase and Binance for similar allegations related to unregistered securities offerings.
The SEC’s focus on treating crypto assets as securities has sparked debates within the industry. A recent federal court ruling declared that XRP, used on the Ripple blockchain, does not qualify as a security when sold to the public but might be considered one for institutional sales.
Check our article on that here.
It seems the SEC is ready to target any cryptocurrency asset and company, excluding those linked to Bitcoin, for securities law violations.
$HEX is down -28% today:
