A federal judge dismissed the SEC’s lawsuit against HEX founder Richard Heart, citing jurisdictional limits. The ruling may impact the SEC’s ability to regulate foreign crypto projects.
Federal Judge Dismisses SEC Lawsuit Against HEX Founder
A federal judge dismissed the U.S. Securities and Exchange Commission’s (SEC) lawsuit against HEX founder Richard Heart on February 28, 2025, ruling that the agency lacked jurisdiction over his cryptocurrency projects.
SEC’s Allegations Against Richard Heart
The SEC had accused Heart, a Finland-based entrepreneur, of conducting unregistered securities offerings through his projects HEX, Pulsechain, and PulseX, raising over $1 billion. The agency also alleged that he misused $12 million for luxury purchases, including sports cars and a 555-carat diamond. The lawsuit was one of the SEC’s highest-profile crypto enforcement actions.
Court Ruling on Jurisdiction
Judge Carol Bagley Amon ruled that the SEC failed to prove Heart specifically targeted U.S. investors. The court found that his online communications were “globally available” rather than deliberately directed at U.S. markets. The judge emphasized that U.S. investor participation alone did not establish jurisdiction, particularly since the tokens were not listed on U.S. exchanges.
Impact on SEC’s Crypto Regulation Efforts
Legal experts suggest that the ruling could limit the SEC’s ability to regulate foreign crypto projects unless they explicitly solicit U.S. investors. The decision sets a precedent for decentralized platforms operating internationally without direct ties to the American market.
Potential SEC Appeal and Broader Implications
The SEC has 20 days to appeal the ruling, though its decision may depend on evolving enforcement priorities under a new administration. The case highlights the difficulties of applying U.S. securities laws to borderless cryptocurrency ventures.
The ruling follows the SEC’s recent dismissal of several other crypto lawsuits, including those against Uniswap, OpenSea, Gemini, Coinbase, and Robinhood.
For more updates on cryptocurrency regulations and legal rulings, stay informed by following the latest industry developments.
