Entrepreneur sold over $1BILLION in unregistered crypto and stole $12million from investors to fund luxurious lifestyle, SEC claims
- Richard Schueler, who goes by the name Richard Heart online, is accused of selling over $1billion in unregistered crypto and stealing another $12million
- The SEC claims he was falsely inflating the value of Hex tokens, and transferred $217million from his crypto trading platform
- He would then use at least $12million to buy a Ferrari, three different Rolex watches — and even a 555-carat black diamond
An entrepreneur was sued by the Securities and Exchange Commission on Monday for allegedly selling over $1billion in unregistered crypto and stealing another $12million from investors to fund his luxurious lifestyle.
Richard Schueler, who goes by the name Richard Heart online, operated three different crypto asset offerings: Hex tokens, PulseChain — a crypto asset security platform, and PulseX — a decentralized trading platform.
Over the years, he has touted these platforms as being the best, claiming they are a ‘pathway to grandiose wealth.’
But in reality, the SEC claims, Schueler was falsely inflating the value of Hex tokens by ‘recycling’ transaction, and transferred approximately $217million of investor funds in PulseChain and PulseX to his own personal wallet.
He would then allegedly use at least $12million of the illegally transferred funds to buy a Ferrari, three Rolex watches — and even a 555-carat black diamond that was put up for auction at Sotheby’s.
Heart, who lives in Finland, frequently posted on social media showing off his opulent purchases, mocking others and detailing his business ‘successes.’
Richard Schueler, who goes by Richard Heart online, was sued by the Securities and Exchange Commission on Monday for allegedly selling over $1billion in unregistered crypto and stealing another $12million from investors to fund his luxurious lifestyle
The influencer regularly shared videos to TikTok of the luxurious items he bought
The SEC claims in its filing that Schueler transferred approximately $217million of investor funds in PulseChain and PulseX to his own personal wallet
According to the lawsuit filed in the Eastern District of New York, Schueler began marketing Hex in 2018, claiming it was the first high-yield ‘blockchain certificate of deposit.’
In numerous YouTube and TikTok videos, Schueler touted a feature of his crypto coins he developed, called ‘staking,’ in which investors could lock up their Hex tokens for a period of time in return for additional tokens at the end of the period.
He claimed they could get an average of 38 percent annual return in the form of additional Hex tokens, comparing his ‘staking’ scheme to interest accrued in a savings account.
From December 2019 through November 2020, Schueler reportedly accepted more than 2.3million Ethereum tokens — worth more than $678million — and exchanged them for his Hex tokens.
‘It appears that 94 to 97 percent of these ETH deposits, however, were “recycling” transactions directed by Heart or other insiders, which enabled Heart… to gain control of a large number of Hex tokens, while creating the false impression of significant trading volume and organic demand for Hex tokens,’ the suit says.
Schueler would then brag that Hex’s value increased 10,000 times over the course of 623 days as he encouraged others to buy in.
He allegedly used at least some $12million of those stolen funds to buy luxury sports cars
On TikTok, Schueler would regularly tout how he became rich from cryptocurrency
If you want to get rich buy the best performing assert. #pulsechain #hex #bitcoin #ethereum #arsenal #hubi #sudan
The suit also stated that from July 2021 through April 2022, Schueler urged investors to deposit their crypto assets to PulseChain and PulseX public wallet addresses in exchange for a promise to deliver PLS and PLSX tokens.
In total, investors from around the world deposited more than $676million, according to the federal lawsuit.
Those investors did not receive their tokens until PulseChain was released on May 12, 2023, almost two years after the end of the PulseChain Offering Period, the suit alleged.
Before that, the SEC claimed, Schueler transferred about $217million from these deposits into a private account, and used at least $12million to buy luxurious items including a $550,000 Rolex Daytona, an $800,000 Rolex GMT Master II and another Rolex watch worth $1.38million.
He also used the crypto funds to purchase a billion-year-old black diamond, believed to be the largest in the world, for $4.3million — tweeting that he would rename it the Hex.com diamond.
As a result of Schueler’s actions, the suit says, as of June 30, Hex’s price was $0.008841, down from a high of $0.56 in September 2021; PLS’s price from PulseChain was $0.0001025, down from a high of $0.0003193 on May 22; and PSLX’s price was $0.00003112, down from a high of $0.000136 on May 22.
‘At present, PLS and PLSX are practically worthless, and Hex’s value has dropped about 98.4percent below its all-time high,’ the suit stated.
Schueler is now facing ‘disgorgement of ill-gotten gains plus prejudgment interest,’ as well as penalties and an injunction barring him from ever participating in another crypto exchange.
Among the items Schueler is accused of buying with stolen funds are two Rolex watches
He also bought a rare 555-carat black diamond from Sotheby’s using the alleged stolen funds
#pulsechain #ethereum #cryptocurrency #airdrop
In TikTok videos, Schueler could be seen showing off his wealth.
He has posted several videos showing him in Gucci clothing and shopping at stores like Prada, Dior and Chanel.
One video even shows him panning over a display of Rolex watches, telling his fans: ‘If you work hard and you try hard, maybe you learn something from me, you could have this too.’
Schueler claimed he grew up impoverished in Florida, claiming on his website: ‘I was born into a poor family in a poor neighborhood.
‘It sucked getting made fun of for using free lunch vouchers,’ he said, claiming he was one of only a few white students at his school.
‘Getting jumped was no fun, but that happened in and out of school.’
Schueler added he worked with his dad delivering newspapers and fixing air conditioners.
‘The sleep deprivation of starting work at 2am made the alcohol and drug addiction of the people you worked with seem less serious,’ he claimed.
An accompanying video also shared what he learned from these experiences.
‘The things that we build will continue to work while we sleep and will continue to affect this world for decades in the future, and the more I think of that, I’m OK with not getting directions right,’ he said.
‘The things that I’m designing they’re designed to be the pinnacle of their field.’
Schueler has posted several videos showing him in Gucci clothing and shopping at stores like Prada, Dior and Chanel
One video even shows him panning over a display of Rolex watches, telling his fans: ‘If you work hard and you try hard, maybe you learn something from me, you could have this too’
An entire section of his website leads to various YouTube videos in which he gives advice on topics like how to ‘fix democracy’ and ‘give better apologies’
His website also touts his accomplishments, claiming: ‘I do more to prevent scams and improve the lives of other people than most do.’
An entire section of the website leads to various YouTube videos where he gives advice on topics like how to ‘fix democracy’ and ‘give better apologies.’
It also says he raised $27million for medical research ‘associated with the world’s largest free Airdrop of coins for PulseChain.com.’
DailyMail.com has reached out to Schueler for comment.
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