Oct. 14, 2023
I am appalled by the SEC’s baseless allegations against Richard Schueler and his innovative crypto products. HEX is not a security and it passes all legs of the Howey test. Let me explain why: First, there is no investment of money in HEX. HEX tokens are minted by the users themselves when they claim or stake their own crypto assets. There is no common enterprise or pooling of funds involved. Second, there is no expectation of profit in HEX. HEX tokens are designed to be a store of value, not a speculative investment. Users are rewarded for holding and locking their tokens, not for trading them. The value of HEX is determined by the market, not by the efforts of others. Third, there is no reliance on the efforts of others in HEX. HEX is a decentralized and autonomous protocol that runs on the Ethereum blockchain. Users interact with the smart contract directly, without any intermediaries or promoters. Richard Heart has no control or influence over the HEX network or its users. Fourth, there is no fraud or misappropriation in HEX. HEX is transparent and auditable, with all its code and transactions available for public scrutiny. Richard Heart has never made any false or misleading statements about HEX or its features. He has never used any of the funds raised by HEX for his personal benefit or for any other purposes than developing and promoting HEX and its related projects. Therefore, HEX is not a security and it does not violate any securities laws. The SEC is wrongfully targeting Richard Heart and his crypto projects with unfounded and malicious claims that will not stand in court. The SEC is trying to stifle innovation and competition in the crypto space, and to deprive millions of HEX users of their financial freedom and sovereignty. This is unacceptable and unjust. I stand with Richard Heart and HEX, and I urge the SEC to drop this frivolous lawsuit and to respect the rights and interests of the crypto community. It's important to note that Richard Heart and his projects are not the only ones being targeted by the SEC. The SEC has been increasingly scrutinizing the cryptocurrency market, and several other cryptocurrencies have also been flagged as unregistered securities¹. For instance, the SEC has recently filed lawsuits against crypto exchanges Binance and Coinbase Global Inc., causing a sharp selloff of 19 tokens¹. In April 2022, SEC Chair Gary Gensler stated that the top five exchanges accounting for 99% of cryptocurrency trading "likely are trading securities" and should have to register with the SEC and comply with applicable laws³. This broad-brush approach by the SEC has raised concerns within the crypto community, as it could impose steep regulatory requirements on digital-asset exchanges². This context further underscores the need for a fair and balanced approach to regulation, one that respects the innovative nature of cryptocurrencies while ensuring investor protection. It's crucial that we continue to advocate for this balance in order to support the growth and development of the crypto space. I hope this message finds its way to those who have the power and the will to effect change. The world of cryptocurrency represents a new frontier in technology and finance, and it’s crucial that we navigate it with both caution and an open mind. The potential for cryptocurrencies to revolutionize industries, economies, and lives is immense. However, this potential can only be realized if we foster an environment that encourages innovation while also protecting investors. Let’s remember that at the heart of every regulation, every law, and every decision, there should be the good of humanity. It’s my sincere hope that this situation with Richard Schueler, HEX, and other cryptocurrencies serves as a catalyst for positive change in how we approach regulation in this space. Let’s strive for a future where innovation thrives, investors are protected, and the immense potential of cryptocurrencies is fully realized for the benefit of all. Thank you for your valuable time and consideration, -John