Bloomberg News reports that the creator of the crypto token Hex was accused of using investor funds worth millions of dollars to buy a 555-carat black diamond known by the name “The Enigma.” The US Securities and Exchange Commission alleged the same.
What did the regulator allege?
The main regulator of Wall Street accused on Monday in federal court that Richard Schueler, also known as Richard Heart had raised more than $1 billion. He did so by selling unregistered securities, including Hex coin and other tokens affiliated with his PulseX decentralized finance platform and PulseChain blockchain network. PulseChain and Heart used approximately $12.1 million of the investor funds for luxury personal purchases. These included expensive watches, high-end automobiles, and diamonds. The regulator alleged the same.
How did it impact the value of the Hex token?
Following the allegations, the Hex token price dropped by almost 25% to a fraction of 1% after the lawsuit was revealed. The price of the tokens of PulseChain’s PLS and PulseX’s PLSX tokens also dropped after the announcement of the lawsuit. However, Richard Heart was not available for comment immediately.
The Hex coin is amongst those traded with a few cents or maybe lesser. It attracted a huge mass following among the enthusiasts of digital assets. Meanwhile, Heart projected himself on social media wearing expensive jewelry and tracksuits and driving expensive vehicles.
In one such allegation by SEC, the agency said that investors of Hex anticipated reasonable returns from the holdings by offering a stake that would have let them lock up the tokens in exchange for the additional coins for the future.
The lawsuit is one of the recent SEC crypto enforcement actions ,taken by the SEC in the current year. Coinbase Global Inc and Binance Holdings Ltd were the other two entities that the US Securities and Exchange Commission sued.
