Hex (HEX) market cap has dropped by nearly $500 million since the U.S. Securities and Exchange Commission labeled it security in its lawsuit against its founder, Richard Heart.
On July 31. the SEC charged Heart with conducting an unregistered securities offering with the issuance of HEX in 2018. The lawsuit named all of Heart’s crypto ventures, including HEX, PulseChain, and PulseX, describing them as fraud.
The regulator further alleged that Heart committed securities fraud by using investors’ funds to buy luxury items.
Following the lawsuit, Hex’s market cap declined to as low as $706 million on Aug. 2 from the $1.47 billion recorded when the lawsuit was announced. However, the market cap has slightly recovered to over $1 billion after the HEX token rallied by more than 20% in the last two days.
Pulsechain TVL dips, trading volume soars
The lawsuit also affected the total value of assets locked on its sister layer-1 network Pulsechain. The TVL fell by more than 50% from $327 million on July 31 to $136 million on Aug. 2, according to DeFillama data. Like the market cap, the TVL has recovered to $206.43 million as of press time.
Additionally, the trading volume of decentralized exchanges (DEX) on the Pulsechain network soared more than 300% to nearly $300 million since the lawsuit.
On Aug. 1, the day after the SEC lawsuit, trading activities on PulseX, the largest DEX on the network, reached an all-time high volume of $138.49 million. Since then, the DEX protocol has averaged more than $50 million in trades.
MetaMask and Uniswap Remove HEX
MetaMask and Uniswap (UNI), two of the biggest crypto platforms, have reportedly removed support for HEX transactions on their platforms.
Some market analysts suggested that the recent SEC action appears to have influenced their decision, possibly driven by a desire to safeguard themselves from potential regulatory repercussions.
However, the development generated strong criticisms from the HEX community and decentralization enthusiasts who questioned how “decentralized” these platforms were.
MetaMask and Uniswap were yet to respond to CryptoSlate’s request for comment as of press time.
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