Judge Dismisses SEC Lawsuit Against Crypto Founder Richard Heart

A U.S. federal judge dismissed the SEC’s lawsuit against Richard Heart, an online entrepreneur accused of raising over $1 billion through unregistered crypto offerings and misusing $12.1 million on luxury items. Judge Carol Bagley Amon ruled that the SEC failed to establish ties between Heart’s alleged misconduct and the United States.

Heart, also known as Richard Schueler, promoted Hex, PulseX, and PulseChain, claiming they offered high returns. The SEC alleged he falsely marketed Hex as capable of yielding 38% annual returns and misused investor funds on luxury purchases, including McLaren and Ferrari sports cars, four Rolex watches worth $3.02 million, and “The Enigma,” a 555-carat black diamond bought for $4.28 million at a Sotheby’s auction in 2022.

However, Amon noted that Heart’s statements targeted a global audience rather than U.S. investors. The SEC also failed to prove that U.S.-based investors engaged in transactions through his platforms. The court further stated that any alleged misappropriation took place entirely abroad via digital wallets and crypto platforms with no proven U.S. connections.

A spokesperson for Heart welcomed the ruling, stating it provides "relief and opportunity" for cryptocurrency projects. The SEC has not responded to the decision.