KEY POINTS
- The SEC accused Heart of securities fraud, alleging that he raised $1 billion via the sales of unregistered securities
- In August, the SEC asked Finland's Ministry of Justice to serve the lawsuit to Heart
- Richard Heart is the founder of HEX and PulseChain
The U.S. Securities and Exchange Commission (SEC) is reportedly facing difficulties in issuing legal notices to HEX and PulseChain founder Richard Schueler, more popularly known as Richard Heart in the cryptocurrency world, in connection with a lawsuit alleging the crypto mogul was selling unregistered securities.
In July, the SEC accused Heart of securities fraud, alleging that he raised $1 billion via the sales of unregistered securities.
"The Securities and Exchange Commission today charged Richard Heart (aka Richard Schueler) and three unincorporated entities that he controls, Hex, PulseChain, and PulseX, with conducting unregistered offerings of crypto asset securities that raised more than $1 billion in crypto assets from investors. The SEC also charged Heart and PulseChain with fraud for misappropriating at least $12 million of offering proceeds to purchase luxury goods including sports cars, watches, and a 555-carat black diamond known as 'The Enigma' – reportedly the largest black diamond in the world," the SEC said in a press release in July.
"Heart called on investors to buy crypto asset securities in offerings that he failed to register. He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods," director of the Fort Worth Regional Office Eric Werner, said, adding, "This action seeks to protect the investing public and hold Heart accountable for his actions."
The major Wall Street regulator now claims that it has requested the Ministry of Justice in Finland to serve the lawsuit to Heart, who is based in Helsinki. However, SEC has reportedly not yet received any word if the crypto mogul has been served.
"On August 22, 2023, Plaintiff formally requested the Ministry of Justice of Finland to effect service of process on Schueler, and through him, Hex, PulseChain, and PulseX, pursuant to subparagraph (a) of Article 5 of the Hague Service Convention for Service Abroad of Judicial or Extrajudicial Documents in Civil or Commercial Matters (the "Convention").," the court filing read, while noting that "to date, the Commission has not received confirmation of service of process on Defendants in Finland pursuant to the Convention."
A teleconference earlier scheduled for Tuesday was postponed by Magistrate Judge Peggy Kuo, who presided over the case filed in the Eastern District of New York.
The SEC said the counsel for the commission was expected to report by Dec. 15, and if it failed to do so, it would mean the financial regulator would have to explore alternative services.
"Counsel for the Commission will report to the Court the status of its service efforts under the Convention by December 15, 2023. If service has not been effected by that time, the Commission will move for alternative service in accordance with Rule 4(f) of the Federal Rules of Civil Procedure," the SEC told the court.
