An old video clip of HEX founder Richard Heart directly addressing the SEC has resurfaced on social media after the regulator filed suit against him on July 31, alleging fraud and unregistered sales of crypto asset securities.
In the video, taken from January’s HexConference, Heart directly addresses the SEC to say that he has saved more people from “getting rekt” in the crypto industry than the SEC.
He further expressed his wish that the regulator would focus its efforts on stopping all the “obviously evil horrible things that are going on, instead of attacking the good people.”Also during his appearance at the conference, Heart claimed that he was the “giving tree of crypto” and a more potent force of good for the people than the SEC.
Heart antagonized SEC in January
The HEX founder said he advocates for self-custody and tries to educate people about security, whereas the SEC has no interest in helping people engage with cryptocurrencies safely. He added that he did everything he could to prevent people from putting their money in companies like Celsius and BlockFi before they collapsed.
He further stated that the SEC has no intention of protecting people or making them whole and used the regulator’s enforcement action against BlockFi before its collapse, which ended in a $50 million settlement, as an example. Heart also claimed without evidence that BlockFi had paid the SEC with money that would have been used to make its users whole after filing for bankruptcy.
He added:
“Now that people that are hoping to get made whole in the BlockFi bankruptcy, have $50 million less to get made whole because the SEC yanked it. That sounds like the opposite of helping people, that sounds like hurting people to me.”
At the time, Heart was talking about the SEC considering most cryptocurrencies as securities and its enforcement actions against various companies in the industry. He said that HEX and his other crypto projects — PulseChain and PulseX — could not be considered securities and would not be targetted by the SEC.
Heart’s primary argument was that the three tokens do not pass all three prongs of the Howey Test since people purchase them from a DeFi protocol like Uniswap and have no expectation of profit.
He further argued that the people who bought these tokens through Uniswap did not know the people behind the project whose work would generate profit — mainly because they do not exist since HEX has no building, office, company, or CEO, with Heart claiming, “[HEX] is the least-security [sic] thing in the game.”
However, as the ensuing months have shown, the SEC staunchly disagrees with Heart’s position and considers almost all cryptocurrencies securities under current law, which does not provide tailor-made rules for the crypto industry.
The regulator has labeled all three tokens launched by Heart as crypto-asset securities in the lawsuit filed against him, including fraud charges over misappropriating investor funds for personal luxury expenses.
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