Introduction On February 28, 2025, U.S. federal judge Carol Bagley Amon completely dismissed the lawsuit filed by the Securities and Exchange Commission (SEC) against Richard Heart (real name Richard Schueler) and his crypto projects HEX, PulseChain, and PulseX. The judge ruled that the SEC lacked jurisdiction, as the alleged violations occurred outside the United States and were not specifically targeted at U.S. investors.
Background of the Case In July 2023, the SEC accused Heart of illegally raising over $1 billion through unregistered crypto offerings and misappropriating $12.1 million of investors’ funds for personal luxury purchases, including a 555-carat black diamond, luxury cars, and watches.
Reason for Dismissal The court found that Heart’s promotional and sales activities were not specifically targeted at the U.S. audience. Communications were globally accessible and not intended to attract U.S. investors. Moreover, the involved tokens were not traded on U.S. exchanges, and there was no evidence of transactions involving U.S. investors. Crucially, Judge Amon added that even if the SEC had jurisdiction over Richard Heart and his crypto products, the charges themselves were inadequately substantiated and would have been dismissed on those grounds as well.
Implications for the Crypto Industry This ruling is viewed as a significant victory for the crypto sector. It highlights the importance of clear jurisdictional boundaries and may serve as a precedent in future cases where the SEC attempts to extend its authority into international crypto activities. Furthermore, the ruling provides more certainty for open-source software developers, as the SEC attempted in this case to characterize software code as an “alter ego” of an individual. This victory is extremely rare, placing Richard Heart among the top 5% of individuals and companies that have successfully defeated the SEC in court.
Reaction from Richard Heart Following the ruling, Heart stated on X (formerly Twitter): “Richard Heart, PulseChain, PulseX, and HEX have completely defeated the SEC and achieved regulatory clarity that nearly no other coins have. They are now safer to work with in ways that almost no other coins are.”
Conclusion The dismissal of the SEC case against Richard Heart marks a rare and significant victory for a crypto entrepreneur against a major U.S. regulator. This ruling offers increased clarity and confidence for his projects and the broader crypto community.
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