Richard Heart intentionally stole from Hexicans says SEC

When the SEC revealed the untold history of Richard Heart’s crypto projects in July last year, his use of investor money was an aside. At the time, ‘Hexicans’ — fans of his flagship project, HEX — were buying tickets for the debut of his feature-length movie. Rather than question Heart’s extravagant lifestyle, many chose to focus instead on the never-before-published history of his supposed ‘blockchain certificate of deposit.’

Oddly, HEX was down 99% from its high by the time his movie premiered.

Heart’s fans have always known that he, like many crypto founders, was rich and flaunted expensive purchases. Nevertheless, he had always promised his fans that his wealth came from elsewhere — his prior business from which he generated millions of dollars.

However, as Eric Wall explained, that was simply a tactic pulled from a book about cult leadership.

“He has literally read books on how to create cults. I think it’s called The 48 Laws of Power. That book outlines these things he did, like sacrifices, adorning himself in jewelry, claiming to be a self-made millionaire, and always claiming the source of his wealth came from elsewhere. Richard applied the lessons from that book almost verbatim.”

In a more recent court filing, SEC commissioners claim that Heart knowingly stole from his fans to buy watches, cars, and other luxury goods. According to the SEC’s opposition to Heart’s motion to dismiss, filed yesterday, Heart acted with scienter — intentional illegality — in misappropriating investor funds.

According to the SEC, Heart “knowingly engaged in a series of labyrinthine transactions designed to obscure his movements of newly invested PulseChain funds.” (PulseChain and its PLS coin was Heart’s second blockchain project, promoted to his HEX audience and partially funded with HEX tokens.) 

Read more: The Highest of Stakes with Richard Heart encapsulates the narcissism of crypto

SEC explains Richard Heart and ‘scienter’

Commissioners continued, “Heart knowingly spent millions of dollars of investor funds on personal luxury items.” To avoid any ambiguity, they reiterate, “Heart knew that he had not purchased his watches, cars, and large black diamond with actual profits from his enterprises, but with funds from investors.”

Driving the point home, “Heart was conscious of his misuse of invested funds.”

The lawsuit between the SEC and Heart’s projects HEX, PulseChain, and PulseX continues. The SEC responded to other legal matters in its filing yesterday, and a judge will soon rule on whether a motion to dismiss will be granted, or whether the case will proceed further toward discovery and trial.

Edit 16:47 UTC, Aug. 23: Removed a reference to Eric Wall doing business with Richard Heart.

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