According to BlockBeats, on August 23, the U.S. Securities and Exchange Commission (SEC) refuted Hex founder Richard Heart's attempt to dismiss his lawsuit, saying it had the right to proceed with the case. The SEC accused Heart of raising more than $1 billion through unregistered securities offerings and using the funds for personal luxury goods. Heart's lawyers countered that Hex, PulseChain, and Pulse X were not securities, and that Heart did not promise a return on investment, so it did not constitute fraud. The SEC insisted that these assets were investment contracts and fell into the category of securities. The next hearing in the case is scheduled for October 24.

As previously reported by BlockBeats, on July 31, the SEC sued Richard Schueler (also known as Richard Heart) for allegedly selling unregistered securities in violation of federal securities laws. The SEC claimed that Richard Heart misappropriated at least $12 million of customer funds for personal purchases of luxury goods instead of developing protocols, thereby defrauding investors.