Crypto Market Update: SEC Drops Fraud Case Against HEX Founder Richard Heart After Jurisdictional Setback

In a major turn of events for the cryptocurrency world, the U.S. Securities and Exchange Commission (SEC) has officially dropped its plan to refile a securities fraud lawsuit against Richard Heart, the controversial founder of HEX, PulseChain, and PulseX. The decision follows a recent court dismissal, which ruled that the SEC lacked jurisdiction to pursue the case in the United States.

Why the Case Was Dismissed

The SEC had initially accused Heart, whose real name is Richard Schueler, of illegally raising over $1 billion through unregistered securities offerings and spending $12.1 million of investor funds on luxury goods. These included high-end sports cars, expensive watches, and a rare black diamond known as “The Enigma,” which he publicly showcased as part of HEX’s promotional efforts.

Despite the serious nature of these allegations, the case hit a legal wall when U.S. District Judge Carol Bagley Amon determined that Heart’s activities did not fall within U.S. jurisdiction. According to the judge, Heart’s crypto fundraising and project marketing were aimed at a global audience through social media and blockchain platforms, with no clear or substantial link to American investors or financial institutions. Additionally, most of the assets and transactions cited by the SEC were either handled outside the U.S. or through decentralized networks with no clear geographical footprint.

The court gave the SEC 20 days to revise and refile the case with stronger jurisdictional evidence, but the agency has now confirmed it will not proceed.

SEC Chooses Not to Refile

In a letter to the court, SEC attorney Matthew Gulde stated that the Commission had reviewed the judge’s ruling and decided against filing an amended complaint. This effectively ends the case and marks a rare retreat by the SEC in its ongoing campaign to crack down on crypto-based securities violations.

While this development may be seen as a setback for U.S. regulators, it also underscores the growing complexity of pursuing legal action in the decentralized world of digital assets, where boundaries and jurisdictions are often blurred.

Crypto Community Celebrates as HEX Rallies

The dismissal sparked immediate excitement among Richard Heart’s supporters and the broader HEX community. Heart took to social media to express gratitude and reaffirm his belief that the case was unjustified from the beginning. “This is a win for crypto, and a reminder that not everything the SEC touches turns to law,” he wrote on X .

In the wake of the announcement, HEX and its associated tokens, PulseChain and PulseX, saw a boost in price as traders responded to the news with renewed confidence. Some analysts even suggested this could re-ignite investor interest in the controversial projects.

However, Heart’s legal troubles may not be over. Finnish authorities have issued a Red Notice for his arrest, tied to separate charges of tax fraud and assault, and have reportedly seized several luxury assets believed to belong to him.

A Cautionary Tale for Regulators and Founders

This case serves as a striking example of the regulatory challenges surrounding crypto. As digital assets continue to operate across borders and platforms, legal frameworks must evolve to meet the demands of an increasingly decentralized financial world.

For now, Richard Heart walks away from this U.S. case unscathed—but the global scrutiny continues.