Following the lawsuit filed by the US Securities and Exchange Commission (SEC) against HEX and PulseChain founder Richard Heart on July 31, there was a TikTok video shared on Twitter by Whale that appeared to show him with shopping bags filled with luxury Louis Vuitton items. However, a swift response in the comments clarified that the video was from over a year ago, labeling it as fear, uncertainty, and doubt (FUD) at its peak.
The SEC’s legal action on July 31 accused Richard Heart of diverting funds improperly from investors’ resources associated with unregistered cryptocurrency assets. The complaint argues that HEX should be categorized as a security and alleges that it fraudulently raised over $1 billion through its fundraising efforts. In the wake of this development, HEX’s value declined by more than 40% against the US dollar over the past two weeks.
Following the lawsuit, Hex’s market capitalization plummeted to as low as $706 million on August 2, down from the initial $1.47 billion reported when the legal action was first announced. However, there has been a modest recovery in the market capitalization, reaching $900 million at the present time, according to data from CoinMarketCap.
Furthermore, the legal proceedings also had a similar impact on the total value of assets locked in its associated layer-1 network, Pulsechain. The Total Value Locked (TVL) dropped by over 50%, decreasing from $327 million on July 31 to $175 million at the time of this statement, based on data from DeFillama. Additionally, platforms like MetaMask and Uniswap (UNI) have taken measures to cease their support for HEX transactions on their respective platforms.