The US securities regulator’s lawsuit accusing Hex founder Richard Heart of raising over $1 billion through unregistered crypto offers and defrauding investors of $12.1 million has been dismissed by a district court judge.
Richard Schueler, the real name of Heart, was also accused of misusing investor funds for luxury goods, including the world’s largest black diamond.
Judge Carol Bagley Amon said, however, that since the Securities and Exchange Commission could not prove that the US had jurisdiction over Heart’s crypto operations which were global and not specifically aimed at US investors, the alleged deceptive actions could not be decided upon.
Case Dismissed Over No US Connection
“Amon said in the February 28 court decision that digital wallets and crypto asset platforms were used for the alleged misappropriation. However, they had no proven connection with the United States.
“To the extent, the Complaint shows that Heart misappropriated investor funds through deceptive mixer transactions, those actions occurred entirely outside the United States,” Amon said.
The SEC claimed PulseChain (PLS), PulseX (PLSX), and HEX (HEX) were among the unregistered securities. Since Amon’s February 28 decision, their respective increases have been around 36%, 67% and 78%.
Heart said he feels relieved to see the Pulse and Hex coins grow knowing that winning a securities-related court case over the SEC was rare.
“HEX has been running perfectly for over 5 years. Heart said in a Feb. 28 X post today’s ruling in favour of a crypto founder and his projects over the SEC brings welcome relief and opportunity to all cryptocurrencies.
Source: Richard Heart
Amon said that the SEC could fix the “deficiencies” found in its complaint by resubmitting it by March 20.
The 555-carat black diamond known as “The Enigma,” was bought for 3.16 million British pounds ($3.97 million).
The securities regulator also accused Heart of spending $3.02 million on four Rolex watches and McLaren and Ferrari sports cars between August 3, 2021, and September 2022.
Heart Still in Legal Trouble
Heart, a US citizen thought to be residing in Finland, is not totally out of legal hot ground.
Finnish authorities arrested Heart on September 13, 2024, on charges of tax fraud and assault. However, the relevant authorities were unable to locate him.
Based on the same allegations, Interpol issued a Red Notice for Heart a few months later on December 22.
Still, Finnish authorities managed to seize about $2.6 million worth of watches he left behind.
Heart remains active on social media platforms, promoting his cryptocurrencies on X and uploading videos to his YouTube channel even though authorities still cannot find him.
