A district court magistrate has rejected the US securities regulator’s suit alleging Hex originator Richard Heart of collecting over $1 billion through unregistered cryptocurrency offerings and deceiving investors of $12.1 million.
Heart, whose actual name is Richard Schueler, was also charged with utilizing those purportedly misappropriated funds for indulgent items — such as the world’s largest black diamond.
Nonetheless, Judge Carol Bagley Amon stated that those purported fraudulent actions couldn’t be assessed as the Securities and Exchange Commission did not prove that the US had authority over Heart’s cryptocurrency operations — which she remarked were international in nature and not specifically directed at US investors.
“The suspected misappropriation transpired via digital wallets and cryptocurrency platforms, none of which were claimed to have any affiliation with the United States,” Amon declared in the court ruling dated Feb. 28.
“Insofar as the Complaint indicates that Heart misused investor finances through misleading mixer transactions, those acts took place completely outside of the United States,” Amon further commented.
The cryptocurrency tokens that the SEC claimed were unregistered securities included PulseChain (PLS), PulseX (PLSX), and HEX (HEX) — which have appreciated approximately 36%, 67%, and 78%, respectively, since Amon issued the ruling.
Heart recognized that prevailing in a securities-related legal case against the SEC was uncommon, adding that he now feels relieved to witness the growth of the Pulse and Hex coins.
“HEX has functioned seamlessly for more than 5 years. Today’s ruling in favor of a cryptocurrency founder and his initiatives against the SEC provides much-needed relief and prospects for all cryptocurrencies,” Heart stated in a post on X dated Feb. 28.
Eight of Schueler’s timepieces were confiscated by Finnish authorities. Source: Finland Police
However, Amon indicated that the SEC can rectify the “shortcomings” found in its complaint by resubmitting it within the following 20 days (by March 20).
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In addition to acquiring “The Enigma” — a 555-carat black diamond valued at 3.16 million British pounds ($3.97 million) — the securities regulator also accused Heart of using investor finances to buy McLaren and Ferrari sports cars and four Rolex watches worth $3.02 million between August 3, 2021, and September 2022.
Heart, a citizen of the US believed to be residing in Finland, is not entirely free from legal difficulties.
On Sept. 13, 2024, Finnish officials placed Heart in custody following accusations of tax fraud and assault. However, the respective authorities have been unable to find him.
A few months later, on Dec. 22, Interpol issued a Red Notice for Heart based on the same claims.
Finnish authorities were, however, able to confiscate around $2.6 million worth of watches that he is thought to have left behind.
Eight of Heart’s timepieces were confiscated by Finnish authorities. Source: Finland Police
While authorities are still unable to trace Heart, he remains active on social media, persistently promoting his cryptocurrencies on X and posting videos to his YouTube channel.
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