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SEC Walks Away From Case Against HEX Founder Richard Heart, Attorney Says
Attorney says dismissal marks only crypto case tossed in full by a federal judge.
What to know:
- The SEC has dropped its fraud case against Richard Heart, founder of HEX, PulseChain, and PulseX.
- The case was dismissed after the SEC chose not to amend its complaint by the April 21 deadline.
- A federal judge had previously dismissed the SEC's initial complaint due to a lack of jurisdiction.
In a rare legal defeat for the U.S. Securities and Exchange Commission, the agency has formally dropped its fraud case against Richard Schueler, better known as Richard Heart, founder of the crypto projects HEX, PulseChain, and PulseX.
On April 21, the SEC informed the Eastern District Court of New York it would not amend its complaint, effectively bringing the case to a close.
STORY CONTINUES BELOW
“That brings the case to an end with a complete victory for Mr. Heart,” said David Kirk, partner at Kirk & Ingram LLP, who represented the HEX founder in an email to CoinDesk. “To my knowledge, this is the only SEC enforcement action against a participant in the cryptocurrency industry that was dismissed in its entirety by a federal judge.”
The court had previously dismissed the SEC’s initial complaint in February, citing a lack of jurisdiction.
Judge Carol Bagley Amon noted that Heart’s activities were not clearly targeted at U.S. investors, CoinDesk previously reported, undermining the SEC’s case.
"This is a victory for open-source software, cryptocurrency, and free speech. The SEC actually sued software code itself in this case, claiming it could be an alter ego of a person," Heart posted on X. "This would have set a terrible precedent and caused perhaps multiple billions of dollars of damage to the vital open source and free software industry that powers most of the Internet and your speech on it."
Though the regulator was granted an opportunity to amend the complaint, it declined to do so by the extended April 21 deadline.
The SEC had originally filed suit in July 2023, accusing Heart of raising over $1 billion through unregistered securities offerings.
Sam Reynolds
Sam Reynolds is a senior reporter based in Asia. Sam was part of the CoinDesk team that won the 2023 Gerald Loeb award in the breaking news category for coverage of FTX's collapse. Prior to CoinDesk, he was a reporter with Blockworks and a semiconductor analyst with IDC.
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Crypto Industry Asks President Trump to Stop JPMorgan’s 'Punitive Tax' on Data Access
A coalition of fintech and crypto trade groups is urging the White House to defend open banking and stop JPMorgan from charging fees to access customer data.
What to know:
- Ten major fintech and crypto trade associations have urged President Trump to stop big banks from imposing fees that could hinder innovation and competition.
- JPMorgan's plan to charge for access to consumer banking data may debank millions and threaten the adoption of stablecoins and self-custody wallets.
- The CFPB's open banking rule, which mandates free consumer access to bank data, is under threat as banks have sued to block it, and the CFPB has requested its vacatur.
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