Richard Heart: SEC Drops $1B Fraud Case After Federal Judge Dismissal

Richard Heart, founder of HEX, PulseChain, and PulseX, beat SEC fraud charges in April 2025 after a federal judge dismissed the $1B unregistered securities case for lack of jurisdiction. Despite Interpol red notice for tax fraud and assault, Richard Heart won complete victory when SEC declined to amend its complaint.

Who Is Richard Heart?

Richard Heart is a Bitcoin, blockchain, cryptocurrency, and internet marketing expert who founded and managed several successful internet startups, the largest having 150 employees with turnover of $60 million operating in mortgage and consumer finance markets. He is a search engine optimization, affiliate marketing, and startup veteran who has appeared on numerous international broadcasts including Russia Today (RT) television and CNBC (Africa) speaking about Bitcoin, blockchain, and cryptocurrency issues.

Richard Heart is best known as founder of HEX, a cryptocurrency he marketed as the first high-yield “blockchain certificate of deposit.” Beginning in 2018, Richard Heart promoted HEX tokens as investment designed to make people “rich,” attracting massive following in crypto community through aggressive marketing and controversial claims about returns.

Richard Heart’s Projects

HEX: Marketed as blockchain CD with staking yields up to 38%

PulseChain: Layer-1 blockchain launched in 2022

PulseX: Decentralized exchange on PulseChain network

Total Funds Raised: Over $1 billion across three offerings

Between 2019 and 2022, Richard Heart orchestrated three major crypto asset offerings. From December 2019 through November 2020, HEX offering collected more than 2.3 million Ethereum (ETH), including through “recycling” transactions that enabled Heart to surreptitiously gain control of more HEX tokens. Between July 2021 and March 2022, he raised hundreds of millions more through PulseChain and PulseX offerings.

The SEC’s $1 Billion Fraud Charges

On July 31, 2023, the Securities and Exchange Commission charged Richard Heart (aka Richard Schueler) and three unincorporated entities 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 Richard Heart and PulseChain with fraud for misappropriating at least $12 million of offering proceeds to purchase luxury goods.

According to SEC’s complaint filed in U.S. District Court for the Eastern District of New York, Richard Heart violated registration provisions of Section 5 of the Securities Act of 1933. The complaint also alleged that Richard Heart and PulseChain violated antifraud provisions of federal securities laws, seeking injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, penalties, and other equitable relief.

SEC’s Key Allegations Against Richard Heart

· Conducted unregistered securities offerings raising $1B+

· Misappropriated $12M for luxury purchases including sports cars and watches

· Bought 555-carat black diamond “The Enigma” (reportedly world’s largest black diamond)

· Designed fraudulent “staking” feature promising 38% returns

· Used “sacrifice” terminology to evade securities laws instead of “invest”

Richard Heart allegedly designed and marketed a “staking” feature for HEX tokens, claiming it would deliver returns as high as 38 percent. The complaint further alleged that Richard Heart attempted to evade securities laws by calling on investors to “sacrifice” (instead of “invest”) their crypto assets in exchange for PLS and PLSX tokens, demonstrating awareness that his offerings might violate securities regulations.

Federal Judge Dismisses SEC Case: Complete Victory

In rare legal defeat for the U.S. Securities and Exchange Commission, the agency formally dropped its fraud case against Richard Heart on April 21, 2025. The SEC informed the Eastern District Court of New York it would not amend its complaint, effectively bringing the case to a close after federal judge dismissed the SEC’s initial complaint citing lack of jurisdiction.

Judge Carol Bagley Amon noted that Richard Heart’s activities were not clearly targeted at U.S. investors, undermining the SEC’s case. Though the regulator was granted opportunity to amend the complaint, it declined to do so by the extended April 21 deadline, marking complete capitulation.

“That brings the case to an end with a complete victory for Mr. Heart,” said David Kirk, partner at Kirk & Ingram LLP, who represented Richard Heart. “To my knowledge, this is the only SEC enforcement action against a participant in the cryptocurrency industry that was dismissed in its entirety by a federal judge.”

Richard Heart posted on X: “This is a victory for open-source software, cryptocurrency, and free speech. The SEC actually sued software code itself in this case, claiming it could be an alter ego of a person. This would have set a terrible precedent and caused perhaps multiple billions of dollars of damage to the vital open source and free software industry that powers most of the Internet and your speech on it.”

The dismissal represents significant blow to SEC’s crypto enforcement strategy. Most SEC crypto cases end in settlements or convictions, making Richard Heart’s complete victory highly unusual. The jurisdictional defense—arguing activities weren’t targeted at U.S. investors—may provide blueprint for other international crypto projects facing SEC scrutiny.

Interpol Red Notice and Criminal Allegations

Despite legal victory over SEC, Richard Heart faces additional serious allegations. In December 2024, Interpol issued red notice for Richard Heart and added him to the organization’s most wanted list for deliberate tax fraud and for assaulting a 16-year-old girl. Red notices are international alerts requesting law enforcement worldwide to locate and provisionally arrest person pending extradition.

These criminal allegations differ fundamentally from SEC’s civil securities fraud case. While Richard Heart successfully defended against SEC by arguing lack of U.S. jurisdiction, criminal charges potentially expose him to arrest in any Interpol member country. The assault allegation particularly damages his reputation regardless of legal outcomes.

Richard Heart has not publicly addressed the Interpol red notice or assault allegations in detail. His silence on these matters contrasts with his vocal celebration of SEC victory, suggesting possible legal strategy of avoiding statements that could be used against him in criminal proceedings.

The $400M Tornado Cash Mystery

In November 2025, at least 21 addresses tied to PulseX transferred over 116,000 Ether (worth more than $393 million) to Tornado Cash on Ethereum. This represents roughly one-third of all Tornado Cash’s current deposits and occurred just months after Richard Heart’s SEC victory.

Tornado Cash is a crypto mixer that lets users pool cryptocurrency deposits into smart contract and withdraw same amount deposited from new cryptocurrency address. This process obfuscates fund flow by severing connection between depositor and recipient. U.S. Treasury sanctioned Tornado Cash in August 2022 over claims it laundered more than $7 billion, though sanctions were lifted in March 2025 after court victories by privacy advocates.

“Right now, it appears a few big ‘whales’ are all dumping into Tornado Cash,” said Taylor Monahan, principal security researcher for MetaMask. The massive deposits make it harder for smaller users to hide their identities, as the unusual transaction sizes stand out in blockchain analysis.

Richard Heart appears to have acknowledged the wallet movements linked to him but has not directly addressed them publicly or in response to media requests. The timing—just after beating SEC and while facing Interpol red notice—suggests potential attempt to obscure fund trails before possible criminal prosecution or asset seizure.

On Friday November 8, 2025, the total value locked in Tornado Cash hit $1.5 billion according to DefiLlama data, nearly double the protocol’s TVL at start of year. Richard Heart’s deposits represent significant portion of this surge, raising questions about motivation behind moving such large sums through privacy protocol immediately after legal victory.

Richard Heart’s Legacy and Controversy

Richard Heart remains one of cryptocurrency’s most controversial figures. His supporters view him as visionary who created innovative staking mechanisms and successfully defended cryptocurrency against regulatory overreach. His detractors see him as scammer who raised billions through unregistered securities and misappropriated investor funds for personal luxury.

The HEX project itself continues operating despite founder’s legal troubles. HEX token holders can still stake tokens and theoretically earn yields, though returns have been far below the 38% originally promised. PulseChain blockchain launched in 2023 continues processing transactions, and PulseX exchange remains functional.

However, the cloud of controversy surrounding Richard Heart affects all his projects. The SEC case, Interpol red notice, and Tornado Cash deposits create perception of impropriety that deters mainstream adoption. Legitimate businesses and institutional investors typically avoid projects with founders facing criminal allegations, regardless of technical merits.

FAQ

Who is Richard Heart?

Richard Heart (born Richard J. Schueler) is the founder of HEX, PulseChain, and PulseX cryptocurrency projects. He’s a controversial entrepreneur who beat SEC fraud charges in April 2025 after federal judge dismissed the case, but faces Interpol red notice for tax fraud and assault allegations.

What happened to the SEC case against Richard Heart?

The SEC dropped its case against Richard Heart on April 21, 2025, after federal judge dismissed the complaint citing lack of jurisdiction over his activities. Judge Carol Bagley Amon noted Richard Heart’s activities weren’t clearly targeted at U.S. investors, and SEC declined to amend complaint.

How much money did Richard Heart raise?

Richard Heart raised over $1 billion across HEX, PulseChain, and PulseX offerings between 2019 and 2022 according to SEC allegations. The HEX offering alone collected more than 2.3 million Ethereum during its main fundraising period.

What is Richard Heart accused of?

SEC accused Richard Heart of conducting unregistered securities offerings and misappropriating $12 million for luxury goods including sports cars, watches, and the 555-carat black diamond “The Enigma.” Interpol issued red notice for deliberate tax fraud and assault of a 16-year-old girl.

Why did Richard Heart deposit $400M into Tornado Cash?

In November 2025, wallets associated with Richard Heart deposited over $393 million in Ether into Tornado Cash privacy protocol. While Richard Heart acknowledged wallet movements, he hasn’t explained motivation. The timing after SEC victory and amid Interpol red notice suggests possible attempt to obscure fund trails.

Is Richard Heart still free?

As of January 2026, Richard Heart has not been arrested despite Interpol red notice. His current location is unknown, though he posts occasionally on social media. Red notices request law enforcement to locate and arrest individuals pending extradition, making international travel risky.