A federal judge has dismissed the U.S. Securities and Exchange Commission’s (SEC) lawsuit against cryptocurrency entrepreneur Richard Heart, ruling that the agency lacked jurisdiction over his digital asset projects.
The decision, issued on February 28, 2025, by Judge Carol Bagley Amon in Brooklyn, New York, marks a significant setback for the SEC’s crypto enforcement efforts.
Heart, a Finland-based entrepreneur also known as Richard Schueler, was accused of conducting unregistered securities offerings through his projects HEX, PulseChain, and PulseX, allegedly raising over $1 billion.
The SEC claimed Heart misused at least $12 million in investor funds for luxury purchases, including high-end automobiles, expensive watches, and a 555-carat black diamond known as “The Enigma.”
Court Ruling Limits SEC’s Reach Over Foreign Crypto Projects
The lawsuit, filed in 2023, was one of the SEC’s most high-profile enforcement actions in the cryptocurrency space. However, the court ruled that the SEC failed to demonstrate that Heart specifically targeted U.S. investors.
Judge Amon noted that while his online communications were accessible globally, they were not deliberately aimed at the U.S. market. Additionally, she pointed out that the digital tokens associated with Heart’s projects were not listed on U.S.-based exchanges, further undermining the SEC’s jurisdictional claims.
The ruling could have broader implications for the regulation of cryptocurrency projects based outside the United States. Legal experts suggest that the decision sets a precedent limiting the SEC’s ability to regulate foreign-based crypto ventures unless there is clear evidence of direct solicitation of U.S. investors.
While the SEC has the option to appeal within 20 days, legal analysts note that the agency’s decision may depend on shifting enforcement priorities under the current administration.
The ruling comes amid a wave of recent SEC dismissals of crypto-related lawsuits, including cases involving Uniswap, OpenSea, Gemini, Coinbase, and Robinhood.
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