In a stunning turn of events, the market capitalization of HEX (HEX) has been hit with a substantial setback, shedding nearly $500 million in the wake of a relentless legal assault launched by the U.S. Securities and Exchange Commission (SEC). The regulatory body’s declaration that HEX is a security has sent shockwaves through the cryptocurrency community, significantly impacting its valuation.

The SEC’s lawsuit, filed on July 31, accuses HEX’s founder, Richard Heart, of orchestrating an unregistered securities offering through the issuance of HEX tokens back in 2018. The scope of the legal action extends far beyond HEX alone, encompassing Heart’s entire portfolio, including PulseChain and PulseX, labelling them as fraudulent enterprises. Moreover, the SEC asserts that Heart misappropriated investors’ funds for personal luxury expenses, adding the charge of securities fraud to the litany of allegations.

The lawsuit’s aftershocks were immediately felt, with HEX’s market capitalization plummeting to a disheartening $706 million on August 2 from the lofty $1.47 billion it had commanded prior to the SEC’s legal salvo. The fallout, however, was far from permanent, as HEX’s value rallied by over 20% in the subsequent two days, propelling the market cap back above the billion-dollar threshold.

The Ripple Effect: Ripple on Pulsechain TVL and DEX Trading Volume
Beyond the immediate impact on HEX, the lawsuit’s ripple effect extended to the adjacent layer-1 network, Pulsechain, and its total value of assets locked (TVL). The TVL witnessed a stark decline of more than 50%, plunging from $327 million on July 31 to $136 million on August 2, as reported by DeFillama. Nevertheless, a measure of recovery has since taken place, with the TVL currently hovering at $206.43 million.

The legal tremors reverberated through the trading volume of decentralized exchanges (DEX) operating within the Pulsechain network. Since the SEC’s legal action commenced, DEX trading volume surged by a staggering 300%, soaring to nearly $300 million. This surge underlines the acute attention and response from market participants following the regulatory offensive.

Industry Giants Retreat: HEX Transactions Stricken from MetaMask and Uniswap
In an unexpected twist, industry giants MetaMask and Uniswap reportedly pulled the plug on HEX transactions within their ecosystems. While neither platform has issued an official statement, market experts suggest that the looming specter of the SEC lawsuit likely prompted this action. It appears to be a precautionary measure to insulate these platforms from potential regulatory repercussions.

However, this maneuver has not escaped the scrutiny of the HEX community and proponents of decentralization. They have raised pointed questions about the authenticity of claims made by MetaMask and Uniswap regarding their adherence to decentralized principles.

Presently, both MetaMask and Uniswap have maintained radio silence in response to inquiries seeking clarity on the matter from CryptoSlate.

As the battle rages on, the HEX community, legal experts, and the broader cryptocurrency landscape eagerly await the unfolding of events, as they grapple with the significant repercussions of the SEC’s lawsuit against HEX’s founder and the ensuing market turmoil.