Hex Founder Richard Heart’s Lawsuit Gets SEC Response

Key Points:

• The SEC has rejected Hex founder Richard Heart’s attempt to dismiss the lawsuit.
• Heart is accused of misusing $8.9 million in investor funds for luxury purchases and manipulating the Hex staking product.

The U.S. Securities and Exchange Commission is pushing back against efforts to dismiss the lawsuit by Hex founder Richard Heart.

Read more: SEC Sues HEX Founder Richard Heart For $1 Billion Securities Fraud

SEC Claims Jurisdiction in Hex Founder Richard Heart’s Lawsuit

In an updated court filing published Thursday, the SEC claimed it has jurisdiction to pursue the case against Hex founder Richard Heart. It asked the U.S. District Court for the Eastern District of New York to deny Heart’s motion to dismiss.

The SEC filed the lawsuit in 2023, claiming Heart—also founder of PulseChain—conducted more than $1 billion in unregistered securities offerings. According to the complaint, he used about $8.9 million of the investors’ money to buy such lavish articles as Ferraris, designer clothes, and a $4.3 million black diamond called Enigma.

The SEC also alleges that Heart marketed Hex as a staking product promising investors a return of 38%, and most of the demand for Hex was manipulated with as high as 97% of the Ethereum used being recycled back into crypto exchanges.

Heart’s Defense Team Brushes off Fraud, Misuse Allegations

Heart’s legal team has rejected the SEC’s claims, saying that Hex, PulseChain, and Pulse X are decentralized blockchain technologies like Bitcoin and should be treated as decentralized; indeed, the SEC did not treat Bitcoin as a security.

They said Hex founder Richard Heart, who lives overseas, never defrauded his investors because he has never promised to pay them back. The case is now set for a hearing on Oct. 24. Richard Heart also responded recently to SEC’s opposition.

In parallel developments, the Ninth Circuit Court of Appeals has reportedly partially overturned the dismissal of a class action against Binance.US over the alleged manipulation of the HEX cryptocurrency price. It remains to be seen how these legal battles will end as Heart’s opposition to the SEC’s claims unfolds.