Oct. 25, 2023
Cassidy M. Oct. 25, 2023 To Whom It May Concern, I am writing to present factual observations and concerns regarding the recent lawsuit filed by the U.S. Securities and Exchange Commission against Richard Heart, HEX, and Pulsechain, alleging unregistered securities fraud. As an informed investor and advocate for the future of blockchain and cryptocurrency technologies, it is evident that the SEC's actions in this case may not align with their primary mission of protecting consumers and fostering innovation. 1. The SEC's Role in Consumer Protection: The SEC plays a crucial role in safeguarding consumers from fraudulent activities within the financial markets. However, the actions taken against Richard Heart and his projects do not constitute fraud. Rather, they appear to be motivated by a desire to maintain control over the cryptocurrency space and eliminate perceived threats to the SEC's authority. As a consumer, it is clear that the SEC's actions in this case may adversely impact me and other investors who have found opportunities in cryptocurrency. 2. Lack of Expectation of Return: I, and numerous other investors, invested in HEX, Pulse, PulseX, and Pulsechain with no expectation of returns based on the efforts of Richard Heart or his development team. As investors, we understood that our contributions were made with full awareness of the speculative nature of these assets. We do not consider ourselves victims of Richard Heart, nor do we seek intervention from the SEC regarding how he allocates his resources. 3. Classification of Coins as Securities: It is evident that HEX and Pulsechain tokens are not securities, and they closely align with the principles of the Howey test, which is a fundamental tool in determining whether U.S. federal securities laws apply to an asset. HEX, like Bitcoin, operates as inert code residing on the Ethereum network. It does not generate profits based on the efforts of others. Every HEX token is created by users who follow the code's rules, mirroring the creation of Bitcoin and similar cryptocurrencies. This implies no investment of money, no common enterprise, and no reliance on the efforts of others in the traditional sense. Instead, HEX and Pulsechain function as self-executing, code-driven systems where users themselves perform all the work. 4. Stifling Innovation with Restrictive Regulations: It is an established reality that restrictive regulations can stifle innovation in the cryptocurrency and blockchain space, which is widely recognized as the future of finance. It is evident that excessive regulatory measures could impede the growth of blockchain-based technologies and deter entrepreneurs from pursuing groundbreaking projects, ultimately hindering the development of this transformative industry. 5. Financial Freedom and Decentralized Finance: It is evident that governments should not exert undue control over individuals' personal finances. Decentralized finance (DeFi) solutions are recognized as a promising path towards preserving financial freedom, providing individuals with greater autonomy over their assets, and reducing the risk of government interference. DeFi fosters innovation, growth, and a free and open market for consumers to transact. It is clear that consumers will, of course, pay their taxes on any crypto gains, but they should be free to transact in any capacity before doing so. In conclusion, I respectfully urge the SEC to consider the potential consequences of their actions on the cryptocurrency industry, investors, and the broader financial landscape. It is evident that the SEC should focus on striking a balance between regulation and innovation, which is essential for the growth of the blockchain and crypto sector. As a consumer and supporter of blockchain technology, it is clear that responsible innovation and regulatory clarity can coexist, benefiting both the industry and investors. You are supposed to protect retail consumers when, in fact, you are hurting them in the case of Richard Heart, Hex, PulseChain, Pulse and PulseX. Please stop. Sincerely, ‘Crypto’ Cassidy