Another Crypto Swindle
Crypto assets continue to be popular despite the fact that the SEC has filed a series of enforcement against actions against the issuers and others alleging a variety of law violations. Those range from the sale of unregistered securities to fraud. Many of the issuers have also been charged with conducting offering frauds and Ponzi like schemes. Nevertheless, investors continue to invest their hard-earned cash despite the risks, hoping apparently to hit the jackpot. Most don’t.
Hex, Pusechain, Pulsex, and Richard Schueer are the latest to be named as defendants in an SEC enforcement action centered on fraudulent offerings. SEC v. Schueler, Civil Action No. 1:23-cv-05749 (E.D.N.Y. Filed July 31, 2023). Mr. Schueer is a U.S. internet marketer residing in Finland who uses the entity defendants to conduct his operations. PulseChain and PulseX are security platforms created and maintained Defendant Schueer, also known as Richard Heart. Through three fraudulent offerings he raised over $1 billion beginning in December 2019.
In the first offering Mr. Schueer/Heart offered and sold Hex tokens. Investors were promised high-yield “Blockchain Certificate of Deposit” on the Ethereum network. Investors were also offered a “staking” through which if they tied up their coins for a period they would get an average annual return of 38% from the tokens give to them at the end. Over a period of about 11 months, beginning in November 2019, about 2.3 million ether or ETH were deposited by investors valued at $678 million. Investors turned over their ether in return for Hex tokens. Defendants essentially gained control of a large number of coins while creating the appearance of demand for Hex tokens.
Beginning in July 2021, Mr. Schueer offered investors the opportunity to deposit their crypto assets for the promise to deliver PLS and PLSX tokens in the future. About $354 million was deposited in PLS tokens and $676 in Pulse X assets to its wallet address in return for the promise of future delivery of PLSX tokens. In fact, the tokens were securities under the teachings of the Supreme Court in Howey.
Finally, Schueer and PulseChain misappropriated at least $12.1 million of PulseChain investor funds. Much of the investor money was used by Mr. Schueer/Heart for personal purchases. The complaint alleges violations of Securities Act Section 5(a), 5(c) and 17(a)(1) & (3) and Exchange Act Section 10(b) and Rule 10(b)-5-(a) and (c). The case is in litigation.
Another Crypto Swindle
Crypto assets continue to be popular despite the fact that the SEC has filed a series of enforcement against actions against the issuers and others alleging a variety of law violations. Those range from the sale of unregistered securities to fraud. Many of the issuers have also been charged with conducting offering frauds and Ponzi like schemes. Nevertheless, investors continue to invest their hard-earned cash despite the risks, hoping apparently to hit the jackpot. Most don’t.
Hex, Pusechain, Pulsex, and Richard Schueer are the latest to be named as defendants in an SEC enforcement action centered on fraudulent offerings. SEC v. Schueler, Civil Action No. 1:23-cv-05749 (E.D.N.Y. Filed July 31, 2023). Mr. Schueer is a U.S. internet marketer residing in Finland who uses the entity defendants to conduct his operations. PulseChain and PulseX are security platforms created and maintained Defendant Schueer, also known as Richard Heart. Through three fraudulent offerings he raised over $1 billion beginning in December 2019.
In the first offering Mr. Schueer/Heart offered and sold Hex tokens. Investors were promised high-yield “Blockchain Certificate of Deposit” on the Ethereum network. Investors were also offered a “staking” through which if they tied up their coins for a period they would get an average annual return of 38% from the tokens give to them at the end. Over a period of about 11 months, beginning in November 2019, about 2.3 million ether or ETH were deposited by investors valued at $678 million. Investors turned over their ether in return for Hex tokens. Defendants essentially gained control of a large number of coins while creating the appearance of demand for Hex tokens.
Beginning in July 2021, Mr. Schueer offered investors the opportunity to deposit their crypto assets for the promise to deliver PLS and PLSX tokens in the future. About $354 million was deposited in PLS tokens and $676 in Pulse X assets to its wallet address in return for the promise of future delivery of PLSX tokens. In fact, the tokens were securities under the teachings of the Supreme Court in Howey.
Finally, Schueer and PulseChain misappropriated at least $12.1 million of PulseChain investor funds. Much of the investor money was used by Mr. Schueer/Heart for personal purchases. The complaint alleges violations of Securities Act Section 5(a), 5(c) and 17(a)(1) & (3) and Exchange Act Section 10(b) and Rule 10(b)-5-(a) and (c). The case is in litigation.