Highlights:
- The judge dismissed the SEC case against Richard Heart due to the lack of U.S. jurisdiction.
- HEX, PLS, and PLSX surge after the judge rules tokens are not securities.
- Richard Heart celebrates court victory and says ruling brings regulatory clarity for crypto projects.
On Friday, a federal judge dismissed a lawsuit the United States Securities and Exchange Commission (SEC) filed against Richard Heart. The regulator accused Heart, whose real name is Richard Schueler, of raising over $1 billion through unregistered cryptocurrency offerings and defrauding investors of $12.1 million.
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SEC’s Allegations Against Heart
The SEC accused Heart of promoting his Hex (HEX) token, PulseChain (PLS) asset network, and PulseX (PLSX) asset trading platform on YouTube and other websites as pathways to immense wealth. The SEC said Heart made false claims that his offerings were not securities. He claimed HEX could give 38% annual returns and called it the most valuable asset ever.
The SEC accused him of spending investor funds on luxury items. He allegedly bought McLaren and Ferrari cars, four Rolex watches for $3.02 million, and a 555-carat black diamond for $4.28 million at a Sotheby’s auction.
#AuctionUpdate "The Enigma": This 555.55 carat Black Diamond sold today for £3,161,000 / $4,292,322. The buyer has opted to use cryptocurrency for the purchase. #SothebysJewels pic.twitter.com/ZuiL9SxET8
— Sotheby's (@Sothebys) February 9, 2022
Following the SEC’s action, Heart filed a motion to dismiss the case. He argued that the securities watchdog had exceeded its regulatory boundaries and failed to provide sufficient evidence of securities law violations.
Court Ruling on Jurisdiction
In a Feb. 28 court order, Judge Carol Bagley Amon stated that the alleged deceptive acts could not be ruled on because the SEC failed to prove U.S. jurisdiction over Heart’s crypto activities. She noted that these activities were global and not specifically aimed at U.S. investors.
The ruling mentioned that the alleged misappropriation involved digital wallets and crypto platforms with no U.S. ties. “To the extent the Complaint shows that Heart misappropriated investor funds through deceptive mixer transactions, those actions occurred entirely outside of the United States,” she said. Additionally, Amon stated that the SEC can correct the deficiencies in its complaint and refile within 20 days, by March 20.
PulseChain Founder Celebrates Legal Victory and Regulatory Clarity
The PulseChain founder shared his victory against the SEC on X, calling it a rare win. He stated that Judge Amon correctly ruled that PLS, PLSX, and HEX are not securities. Heart added that these tokens can now thrive alongside other crypto assets in the market.
He thanked President Donald Trump for supporting the digital asset industry. He said this support has brought regulatory clarity. Heart stated that HEX has operated smoothly for five years. He added that the ruling provides relief for both the project and the broader crypto industry.
I appreciate Judge Amon's careful ruling which has dismissed all of the SEC's claims against me. This type of victory over the SEC is quite rare. PulseChain, PulseX and HEX are not securities and should be allowed to flourish. HEX has operated flawlessly for over 5 years. Today's…
— Richard Heart (@RichardHeartWin) February 28, 2025
HEX, PLS, and PLSX Surge as Judge Throws Out Fraud Case Against Richard Heart
HEX, a token linked to Richard Heart’s PulseChain, jumped over 52% after a U.S. judge dismissed a fraud case against him and the SEC. In the past 24 hours, the token surged from about $0.00225 to $0.003972. Other related assets also saw significant gains, with PLS rising 17% and PLSX increasing 48%.
Heart Faces Global Legal Issues
Heart, a U.S. citizen reportedly in Finland, still faces legal issues. Finnish authorities arrested him on Sept. 13 last year for tax fraud and assault but later lost track of him. On Dec. 22, Interpol issued a Red Notice for the same charges.
Authorities seized $2.6 million in abandoned watches. Authorities have not yet located Heart, but he remains active on social media. He continues to promote his cryptocurrencies on X and regularly uploads videos to his YouTube channel.
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