A district court magistrate has dismissed the US securities regulator’s petition alleging Hex founder Richard Heart raised more than $1 billion via unregistered crypto offerings and deceived investors of $12.1 million.
Heart, whose actual name is Richard Schueler, faced allegations of utilizing those supposedly misappropriated funds to acquire luxurious items — including the largest black diamond in the world.
Nonetheless, Judge Carol Bagley Amon stated that those purported fraudulent actions couldn’t be addressed as the Securities and Exchange Commission failed to demonstrate that the US had authority over Heart’s crypto operations — which she indicated were international in nature and not specifically aimed at US investors.
“The supposed misappropriation happened through digital wallets and crypto asset platforms, none of which were claimed to have any ties to the United States,” Amon remarked in the Feb. 28 court decision.
“To the degree the Complaint indicates that Heart misappropriated investor capital through misleading mixer transactions, those actions took place entirely outside of the United States,” Amon elaborated.
The crypto assets that the SEC claimed were unregistered securities included PulseChain (PLS), PulseX (PLSX) and HEX (HEX) — which have surged approximately 36%, 67% and 78%, respectively, since Amon issued the ruling.
Heart recognized that prevailing in a securities-related lawsuit against the SEC is uncommon, expressing relief at the recent progress of the Pulse and Hex coins.
“HEX has functioned seamlessly for over 5 years. Today’s ruling favoring a cryptocurrency creator and his initiatives over the SEC provides beneficial relief and prospects for all cryptocurrencies,” Heart stated in a Feb. 28 post on X.
Eight of Schueler’s watches were confiscated by Finnish authorities. Source: Finland Police
Amon, however, noted that the SEC could rectify the “shortcomings” identified in its complaint by refiling within the next 20 days (by March 20).
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Along with acquiring “The Enigma” — a 555-carat black diamond valued at 3.16 million British pounds ($3.97 million) — the securities regulator also alleged that Heart funneled investor resources into McLaren and Ferrari sports cars and four Rolex watches totaling $3.02 million from August 3, 2021, to September 2022.
Heart, a US national believed to be residing in Finland, is not completely out of legal issues.
On Sept. 13, 2024, Finnish authorities detained Heart following accusations of tax evasion and assault. However, the relevant officials have struggled to track him down.
Months later, on Dec. 22, Interpol issued a Red Notice for Heart based on the same claims.
Finnish authorities managed to confiscate around $2.6 million worth of watches that he is suspected of abandoning.
Eight of Heart’s watches were confiscated by Finnish authorities. Source: Finland Police
While authorities are still unable to locate Heart, he remains active on social media, persistently promoting his cryptocurrencies on X and producing content for his YouTube channel.
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