All You Need to Know About Richard Heart - The Founder of PulseChain & HEX

Richard Heart, a prominent figure in the cryptocurrency world, is known for his ambitious projects and polarizing persona. As the founder of HEX PulseChain, Heart has contributed to the blockchain space, allowing him to execute some unethical activities with his projects and facing many controversies.

Currently, PulseChain ($PLS) is trading at $0.00004565, 83.76% down from its all-time high. It has a self-reported market cap of $684.26 million. On the other hand, HEX is down 79.84% from its yearly high, currently trading at $0.00173. These figures reflect the challenges faced by both projects.

Biography of Richard Heart

Richard Heart, born Richard Schueler, grew up in Pittsburgh, Pennsylvania. From a young age, he showed a keen interest in technology and entrepreneurship. His early ventures included working in internet marketing and finance, laying the foundation for his future endeavors in the cryptocurrency space.

Prior to the launch of HEX, Heart's claimed background as a computer engineer specializing in web application development was overshadowed by his promotion of internet spamming courses. These courses, widely condemned for their unethical nature, cast a shadow on his reputation.

Credit: watcher.guru

Heart's interest in cryptocurrency was sparked by his research into blockchain technology, which he sought to exploit for personal gain. He cultivated an online persona as a philanthropist, often boasting about his contributions to social justice in his YouTube videos. These videos covered a range of topics, from political agreement to educational reform, in an attempt to present a positive image.

Despite controversies surrounding his methods and motives, Heart's social media influence, particularly on Twitter, positioned him as a notable figure in cryptocurrency.

His estimated net worth of around $200 million is believed to be largely derived from the misfortunes of those who invested in HEX at its peak, only to see their investments plummet as Heart allegedly dumped his tokens on the market.

Richard Heart's Dubious Past

Heart's dubious activities date back to 2002 when he was sued under Washington State Law for sending unsolicited commercial messages with deceptive information. His notoriety as the "Spam King" was just the beginning.

From 2005 to 2007, Heart was linked to a criminal network in Panama involving crimes like money laundering, theft, extortion, and blackmail. Reports from Panama-Guide.com implicated him in collaborations with robbers, extortionists, and corrupt officials.

Heart's real identity, Richard Schueler, was exposed in a 2007 Google Groups post by Miguel Antonio Bernal. The post exposed his role in exploiting Panama's lenient judicial system.

Despite his dark past, Heart rebranded himself as a cryptocurrency thought leader, even as his HEX project was scrutinized for being a sophisticated scam designed to trap unwary investors with promises of high returns.

Richard Heart Projects: PulseChain, PulseX, and HEX

Richard Heart is the visionary behind several innovative blockchain projects, including HEX, PulseChain, and PulseX. Each of these projects aims to address different aspects of the blockchain and cryptocurrency ecosystem, but they are all interlinked, creating a comprehensive and ambitious vision for the future of decentralized finance.

HEX

HEX is an Ethereum-based token that positions itself as a blockchain certificate of deposit (CD). Much like traditional CDs offered by banks, HEX allows users to stake their tokens for a specified period, earning rewards upon completion.

The longer users wait to redeem their tokens, the more HEX they receive, incentivizing long-term holding. This unique rewards system has garnered significant attention, positioning HEX as a distinctive player in the crypto space.

PulseChain

In 2023, Richard Heart announced PulseChain, a bold project aimed at addressing the scalability and security issues that have long plagued Ethereum. PulseChain is a fork of the Ethereum blockchain, designed to improve upon its predecessor's value proposition.

The project raised billions of dollars through an initial coin offering (ICO) referred to as a "sacrifice." This fundraising strategy emphasized the voluntary nature of contributions, encouraging participants to support the project without expecting anything in return.

PulseChain aims to enhance Ethereum's functionality by providing ETH users with a free copy of their tokens and NFTs on the Pulse network. Additionally, it claims to be more environmentally friendly, although this point became less relevant following Ethereum's transition to a proof-of-stake consensus mechanism.

The network's native token, PLS, is central to its operations, used to activate validators, pay for transactions, and bridge to other chains. Users could obtain PLS tokens by participating in a sacrifice phase, donating cryptocurrencies or fiat currency to supported addresses or charities.

PulseX

Complementing PulseChain is PulseX, a decentralized exchange (DEX) that operates similarly to Uniswap. PulseX enables users to swap any ERC-20 token, including HEX, or NFT on the Pulse network.

To enhance the value of PLS, PulseX reduces the supply of the token over time by burning a portion of the fees collected from transactions. Both PulseChain and PulseX had their own sacrifice phases, allowing users to acquire PLSX tokens (PulseX native tokens) by sacrificing PLS or other cryptocurrencies.

This process resulted in $11 billion worth of HEX being locked up, demonstrating significant user engagement and commitment to the ecosystem.

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Controversies and Criticisms

Despite their innovative features, the relationship between PulseChain, PulseX, and HEX has sparked considerable debate. Some critics have accused HEX, PulseChain and PulseX of being Internet scams or Ponzi schemes, arguing that these projects might be mechanisms for Richard Heart to maintain control over the HEX ecosystem. Heart's promotional tactics, characterized by aggressive marketing and lofty claims, have further fueled skepticism and criticism.

The Birth of HEX: The Alleged "Ponzi Scheme"

In December 2019, Richard Heart launched HEX, marketed as the first high-interest blockchain certificate of deposit. HEX allows users to stake their tokens in return for interest, much like traditional banking CDs, but in a decentralized manner.

The concept behind HEX is simple: it provides a financial product on the blockchain that rewards users for locking up their tokens for a specified period.

However, HEX has been surrounded by controversy since its inception. Critics have labeled it a "Ponzi scheme," primarily due to its aggressive marketing tactics and the high returns, as high as 38 percent, promised to early adopters.

Despite these controversies, HEX has built a significant following and amassed a large market capitalization. According to CoinMarketCap, HEX's market cap peaked at over $40 billion, making it one of the top cryptocurrencies by market value at its height.

But as it stands now, Hearts is in a legal battle with the SEC, and the future of PulseChain and HEX is uncertain. Most people claim it to be another form of a Ponzi scheme.

The HEX Ponzi Scheme

Richard Heart has been key in promoting HEX and PulseChain, utilizing platforms like Twitter and YouTube. His promotion often includes controversial statements and predictions of cryptocurrency, drawing significant attention.

The launch of PulseChain and HEX has sparked a lively debate, with some media outlets hailing the projects' innovation, while others cast doubt on their marketing tactics and legitimacy. This controversy has kept the cryptocurrency community engaged and intrigued.

HEX has made a name for itself with its bold and unconventional marketing tactics. Unlike other cryptocurrencies, HEX has been promoted through a variety of channels, from magazines and buses to physical mail and TV commercials. This surprising approach has piqued the interest of many.

These campaigns target a broader audience, including those unfamiliar with cryptocurrency, luring them with promises of substantial returns.

Notably, HEX's marketing language and product design have been crafted to avoid legal scrutiny. A dedicated section on its website explains why it is not a Ponzi or pyramid scheme.

HEX claims to offer returns up to 10,000x, but this is unsupported by any real-world assets, raising red flags about its sustainability. The platform does not disclose detailed operational information, making it difficult for investors to verify its legitimacy.

HEX has been accused of artificially inflating its token value through tactics like token buybacks, recycling investor funds, and creating fake accounts. This alleged market manipulation misled investors about the project's success.

The platform's promises of unsustainable returns, lack of transparency, uneven profit distribution, and assurances of quick riches align closely with the characteristics of a Ponzi scheme. The controversy surrounding Heart's past and the U.S. Securities and Exchange Commission's (SEC) legal action has further fueled the debate.

Fake HEX Staking Program

nother major allegation involves the HEX staking program, which the SEC claims was entirely fraudulent. In legitimate proof-of-stake (PoS) systems, staking tokens requires technical work, such as validating transactions and securing the network.

According to the SEC, the HEX's staking program was not about network security work, but rather about offering high returns for simply locking up tokens. The SEC argues that this program was designed to keep HEX tokens off the market and artificially inflate their price, with no real technical purpose.

Furthermore, HEX stakers faced penalties for not withdrawing their stakes on time, with those fees going back to the Flush Address-allegedly enriching Heart once again.

This dubious setup exploited investors by selling worthless tokens and penalizing them further for failing to adhere to the staking rules

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Richard Heart Legal Troubles and Controversies Around HEX, PulseChain, and PulseX

In July 2023, the U.S. Securities and Exchange Commission (SEC) charged Richard Heart and the entities he controls-HEX, PulseChain, and PulseX-with conducting unregistered offerings of crypto asset securities that raised over $1 billion from investors.

The SEC's complaint, in a revelation that may shock many, accuses Heart of misappropriating a staggering $12 million of these funds to purchase luxury goods, including sports cars, watches, and the world's largest black diamond known as 'The Enigma.'

The SEC alleges that Heart began marketing HEX in 2018, claiming it was the first high-yield' blockchain certificate of deposit.' Between December 2019 and November 2020, Heart and HEX allegedly offered and sold HEX tokens in an unregistered offering, collecting more than 2.3 million Ethereum (ETH). This was partly achieved through 'recycling' transactions, a process where the same funds are used multiple times, enabling Heart to gain control of more HEX tokens.

The SEC's most scandalous claim is that Heart and his associates recycled investor funds during the HEX presale between 2019 and 2020. This was achieved through the 'Hex Flush Address,' a mechanism that received fees from HEX users and acted as a holding address for investor funds during the initial sale. The 'Hex Flush Address' was allegedly used to obscure the source of the funds and make it appear as if new investments were being made.

According to the SEC, Heart and his team moved funds from the 'Hex Flush Address' to a centralized exchange through a series of transactions to obscure their trail. These funds were allegedly sent back to the HEX' Contract Address,' a digital location where the HEX tokens are stored, masquerading as new investments. The 'Contract Address' was allegedly used to give the appearance of new investments, when in fact, they were recycled funds.

This practice significantly inflated the apparent success of the HEX presale. While the presale seemed to attract $678 million worth of ETH, the SEC claims the actual investment was only about $34 million, with recycled funds constituting 94%-97% of the purported investments.

This artificial inflation, as the SEC claims, misled potential investors about the project's success and allowed Heart to control most HEX tokens, a situation of grave concern.

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Heart and HEX Manipulations

The SEC further charged Heart with designing and marketing a staking feature for HEX tokens, promising high returns. Heart allegedly attempted to evade securities laws by instructing investors to "sacrifice" their crypto assets in exchange for PLS and PLSX tokens rather than "invest" them.

The marketing strategy for HEX, which included describing the offering as a "sacrifice" tied to freedom of speech rather than a traditional investment, was a deceptive ploy.

This 'sacrifice' rhetoric was a deliberate ploy to avoid SEC scrutiny, according to the SEC's findings.

The complaint further states that Heart conducted two unregistered crypto asset security offerings between July 2021 and March 2022, raising hundreds of millions more. These unregistered offerings are a clear violation of securities laws.

These funds were intended to support the development of PulseChain and PulseX through the offerings of their native tokens, PLS and PLSX.