SEC Case Dismissed Because of Jurisdiction Problems
A US district court judge has dismissed the Securities and Exchange Commission’s (SEC) fraud case against Hex creator Richard Heart. The suit charged Heart with raising over $1 billion through unregistered cryptocurrency offerings and the theft of $12.1 million for the purchase of luxuries, including the world’s largest black diamond.
Lack of US Jurisdiction
Judge Carol Bagley Amon ruled that the SEC failed to demonstrate US jurisdiction over Heart’s alleged deceptive conduct. In Amon’s Feb. 28 ruling, the transactions were alleged to have been conducted globally and were not specifically targeted at US investors.
“The alleged misappropriation occurred through crypto asset platforms and digital wallets, none of which were alleged to have any connection to the United States,” Amon stated.
The judge further stated that even if Heart had employed fraudulent mixer transactions to steal funds, such actions were conducted beyond US borders.
Crypto Prices Soar After Ruling
After the court ruling, Heart’s related tokens saw dramatic price surges:
- HEX (HEX): 78% up
- PulseChain (PLS): 36% up
- PulseX (PLSX): 67% up
Heart welcomed the ruling on X (formerly Twitter), pointing out that “HEX has run without a hitch for over five years” and terming the judgment as a “welcome relief” for the cryptocurrency industry.
SEC May Re-file Complaint by March 20
Though the court has rejected the action, Amon stated that the SEC can re-state the complaint by surmounting the deficient areas within 20 days with March 20 being the date.
Heart’s Spending Spree Under Attack
The SEC claimed Heart used investor funds to make expensive purchases like:
- “The Enigma” black diamond (555 carats) – $3.97 million
- McLaren and Ferrari sports cars
- Four Rolex watches – $3.02 million (purchased between Aug. 3, 2021, and Sept. 2022)
Legal woes continue to pursue Heart
While the SEC case was dropped, Heart has other court cases in Finland. He was arrested by Finnish authorities on Sept. 13, 2024, on tax fraud and assault charges. He remains missing, with Interpol putting out a Red Notice for his arrest on Dec. 22.
Finnish authorities have managed to seize $2.6 million worth of watches suspected to have been abandoned by Heart.
Heart Remains Active Online
Despite ongoing legal troubles, Heart still promotes his cryptos and speaks with fans via social media, openly tweeting on X and posting videos on YouTube.
How the SEC proceeds remains uncertain, but the crypto community is keeping close tabs as events develop.
