The SEC vs Richard Heart: Everything You Need To Know!

Let’s dive right into the latest crypto news, hot off the press: The SEC vs Richard Heart.

The aim of this newsletter is to share information and resources plus let you know my top tip on what to do as this situation unfolds.

Let’s get into it.

Background
Richard Heart is the founder of Hex, Pulsechain and PulseX, DeFi projects that myself and many DWG clients are invested in. Richard is the latest to be targeted by the SEC in what is an on-going attack on the cryptocurrency space.

The claims are that Richard Heart’s projects are securities, (very similar to the XRP case) and that he has defrauded investors by spending their coins on luxury cars, diamonds and clothes! The SEC has filed a civil action against Richard himself.

And the whole crypto community is talking about it!

Now, it’s no secret Richard is a divisive figure. He has a strong community of followers who passionately believe in and support him. But there are many others who don’t like him and can’t stand his flamboyant marketing tactics. The chatter is on fire, and this is just some of the sentiment being shared:

“The SEC has no power over DeFi, this is a huge overreaction.”

‘HEX is community-driven and this is another opportunity for the community to rise up and shine.’

“The SEC’s allegations have a tenuous foundation at best and can be easily proven otherwise.”

‘If they can’t prove XRP is a security, how can they possibly prove Richard Heart’s projects are?’

So what’s our take?
Personally, I am not concerned by this news, and there are many reasons for that. One is that I’ve seen all this before. In fact, we all saw it most recently with XRP. The SEC lost that case, and now a precedent has been set.

Should you sell? Should you buy? 
If you’re an investor who has a position in any of these projects, I understand that this is not ideal news. But I would caution you against acting in haste right now. The dust from this event is everywhere at the moment and it’s wise not to do anything until it has settled. This is a very reactive time in the market, and I’ve seen things turn quickly when buyers see value and enter at a discount. There are investors who are right now buying the dip and there is even speculation that this whole debacle is a publicity stunt for Richard’s upcoming documentary which is being released this week (any publicity is good publicity, so the saying goes!).

One of the most important things to remember with cryptocurrencies is that it’s a long game, and volatility is the price we pay for gains. Time spent in the market has ALWAYS proven to pay better, so think long term, not short term. A great aspect of blockchain is traceability of transactions. That means to say it is almost impossible to hide / falsify where coins have gone. Community investigators are already delving into the known project addresses of HEX / Pulsechain to disprove the allegations being made.

Thanks to the SEC, the whole crypto space is now watching Richard Heart. If he does win against them, what do you think this will do for not just his projects, but the entire crypto space? We’ve already seen the SEC lose once this year, and the crypto community is still holding strong. Despite every effort to take us down, this community, and the Decentralised Finance projects in it, are not going anywhere soon.

I have included below a list of resources you may wish to look into, including the SEC document and some of the points the community are raising against it. Have a read, manage your emotions, don’t get swept up in fear, and stay informed.

LINKS:

The SEC complaint pdf:
https://www.sec.gov/files/litigation/complaints/2023/comp-pr2023-143.pdf

Richard Heart discussing the SEC (prior to the claim) https://twitter.com/TheRealTBirdHex/status/1686048264448000006

A well-written counter to the SEC claims https://twitter.com/hopperlife/status/1686175659134173184?s=20