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SEC sues Richard Heart and his projects Hex, PulseChain and Pulse X for fraud, securities violations on July 31, 2023 at 4:46 pm

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The U.S. Securities and Exchange Commission (SEC) said it is suing Richard Schueler, known online as Richard Heart and his three crypto projects, Hex, PulseChain and PulseX, for conducting unregistered offerings of “crypto asset securities.”

The unregistered offerings raised more than $1 billion in crypto from investors, the agency stated.

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Heart and PulseChain also were charged with fraud “for misappropriating at least $12 million of offering proceeds to purchase luxury goods including sports cars, watches, and a 555-carat black diamond known as ‘The Enigma’ – reportedly the largest black diamond in the world.”

PulseChain launched in May, and PulseX is the exchange on its blockchain that allows users to exchange other tokens on its network, according to its website.

The two entities were off to a rocky start due to their connection to Hex and some community members’ concerns about its fundamentals. Hex has been around since 2019 and doesn’t have a stellar reputation because many market players view it as a scam due to its advertisements as the first “blockchain certificate of deposit.” It claimed that users who stake its token could mine new coins with high APYs and deposits are worth “trillions of dollars” and are “worth more than gold, credit card companies and cash.”

With that said, Hex claims it’s not a scam, and even has a page on its website dedicated to clarifying itself.

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The SEC echoed that Heart allegedly created the “staking” feature for HEX tokens, which he claimed would provide yields as high as 38%, the agency stated. The complaint further alleges that 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.”

From December 2019 to November 2020, Heart and Hex allegedly offered and sold HEX tokens in an unregistered offering, bringing in over 2.3 million ether, worth about $4,271,468,000 at present value, the SEC stated.

The SEC also alleged that between July 2021 and March 2022, Heart created two additional unregistered crypto tokens, PLS and PLSX, that raised hundreds of millions in crypto to support PulseChain and PulseX, respectively.

The price of the HEX, PLS and PLSX tokens fell 24%, 25% and 42%, respectively, on Monday after news of the SEC’s complaint.

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In recent months, the SEC has ramped up efforts to crack down on the crypto industry, going after companies big and small for alleged securities violations, fraud, and other activities. As the agency continues to scrutinize the space, we could well see other firms facing lawsuits in the coming months.

All in all, the SEC’s issue is with companies treating crypto assets as securities, something that the industry and other government regulatory bodies don’t agree on.

Earlier this month, a federal court ruled that the XRP token, used for the Ripple blockchain, is not a security when sold to the broader public, but could be considered as one for institutional sales. The SEC had alleged in its case that Ripple and two executives had raised $1.3 billion in an alleged “unregistered, ongoing digital asset securities offering.”

Stu Alderoty, chief legal officer of Ripple Labs, told me on TechCrunch’s Chain Reaction podcast that the ruling could potentially provide clarity for other pending lawsuits. “I think our case and the decision rendered by our judge will provide comfort to other judges that the SEC is just misguided.”

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But, he said, the question that policymakers and lawyers should be asking is, “What’s the best regulatory framework that we can create that protects the integrity of the market?”

​ The U.S. Securities and Exchange Commission (SEC) said it is suing Richard Schueler, known online as Richard Heart and his three crypto projects, Hex, PulseChain and PulseX, for conducting unregistered offerings of “crypto asset securities.” The unregistered offerings raised more than $1 billion in crypto from investors, the agency stated. Heart and PulseChain also were 

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X Opens the Door to Adult Content With New Policy

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X, the social media platform formerly known as Twitter, has made a significant policy shift by officially permitting adult content on its platform with some restrictions and guidelines.

In an update to its rules, X stated that users can now share “consensually produced and distributed adult nudity or sexual behavior” as long as it is properly labeled and not prominently displayed in areas like profile pictures or header images.

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“We recognize that many of our users are adults who want to freely express themselves by sharing legal adult content,” said an X spokesperson. “At the same time, we have a responsibility to protect minors and prevent exposure to explicit material without proper labeling.”

Under the new guidelines, users who “regularly post” adult content must adjust their settings to automatically mark images and videos as sensitive content, which blurs or hides the media by default. By default, users under 18 or who haven’t entered their birth date cannot view this sensitive adult content.

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The policy prohibits content “promoting exploitation, nonconsent, objectification, sexualization or harm to minors, and obscene behaviors.” It applies to all adult content, whether photographic, animated, or AI-generated.

X has stated that it will monitor user-generated content and adjust account settings for those who fail to properly mark pornographic posts. Similar rules and enforcement will apply to violent content as well.

The move aligns X with Apple’s app store guidelines, which allow apps with adult content as long as it is hidden by default and behind proper age gates and content warnings.

While adult content was already present on X, this policy update officially permits and regulates it, aiming to balance freedom of expression for consenting adults with protecting minors from exposure to explicit material.

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However, enforcing these rules consistently may prove challenging for X’s reduced content moderation teams following recent layoffs and cost-cutting measures.

The policy shift has drawn mixed reactions, with some praising X for embracing adult expression while others raise concerns about the potential for the platform to become inundated with pornographic content despite the restrictions.

As X navigates this new territory, the effectiveness of its labeling requirements, age verification measures, and content moderation efforts will be closely watched by users, regulators, and advocacy groups alike.

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Trump’s Conviction Raises Stakes for 2024 Election

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In a stunning fall from grace, Donald Trump has been convicted on 34 felony counts of falsifying business records related to a hush money payment made to conceal an alleged affair during the 2016 campaign. While Trump has vowed to appeal, the guilty verdict represents an unprecedented legal rebuke of the former president and frontrunner for the 2024 Republican nomination.

The question now is whether this first-ever criminal conviction of a former U.S. president will derail Trump’s increasingly plausible path back to the White House. The answer likely hinges on a narrow but potentially decisive sliver of persuadable voters in battleground states.

For Trump’s ardent base of supporters, the conviction seems to matter little. They have remained stubbornly loyal through past scandals, impeachments, and investigations. Many have already shrugged off the guilty verdict as an expected outcome from a “witch hunt” prosecution. In their eyes, Trump is the victim of a politicized injustice system rigged against him.

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But for the moderate Republicans, independents, and suburban swing voters who abandoned Trump in 2020, this criminal conviction could prove a bridge too far. The idea of reinstalling a convicted felon in the Oval Office may be unpalatable, even for those underwhelmed by President Biden’s leadership.

Trump’s ability to win back these key voting blocs in Arizona, Georgia, Michigan, Pennsylvania, and Wisconsin will likely decide if the conviction is a fatal blow or a mere speed bump on his return to power. A small but decisive number of alienated moderates could make the difference in another nail-bitingly close Electoral College finish.

Of course, Trump has repeatedly defied conventional wisdom and political norms throughout his improbable rise. His supporters point to examples like Eugene Debs garnering over 900,000 votes while campaigning from prison in 1920 as proof a conviction does not disqualify a candidate.

And Trump will surely leverage the conviction to his advantage, stoking grievances and portraying himself as a martyr persecuted by the “deep state.” His rallying cry will be that the American people, not corrupt prosecutors, should decide his political fate.

Ultimately, the impact of Trump’s conviction may come down to the sentencing and outcome of appeals. A lengthy prison term would be a near-impossible hurdle. But if he avoids incarceration, the stain of being a convicted felon on the campaign trail is a heavy burden.

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In a nation deeply divided over Trump’s legacy, voters in 2024 will judge whether his norm-shattering presidency warrants a norm-shattering return to power as a convicted criminal defendant. The stakes for American democracy have never been higher.

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Trump is Found Guilty by Jury

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The jury in Donald Trump’s hush money trial has reached a verdict after deliberating for less than two days. The 12 jurors will return to the courtroom shortly to announce their decision on the 34 counts of falsifying business records that Trump faced related to the $130,000 payment made to adult film star Stormy Daniels before the 2016 election.

Trump has been present in the courtroom awaiting the verdict.  The jury had requested to rehear portions of testimony from key witnesses David Pecker and Michael Cohen during their deliberations, suggesting they closely scrutinized the evidence around the alleged hush money scheme.

A guilty verdict would represent a significant legal setback for Trump as he campaigns for the 2024 Republican presidential nomination. An acquittal would be a boost for his campaign efforts. The high-profile trial has garnered immense attention, with the testimony providing insight into the alleged cover-up of the payment to Daniels.

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