Court Dismisses SEC Lawsuit Against HEX Founder

The Eastern District Court of New York found part of the arguments by the SEC unsubstantiated in the case against the founder of HEX, PulseChain, and PulseX, Richard James Schueler, better known in the crypto industry as Richard Heart.

According to the judge, the regulator failed to establish personal jurisdiction over Heart, a U.S. citizen residing in Finland. Arguments regarding the businessman’s online appearances at American conferences were deemed “insufficient,” and direct contacts with local investors “unconfirmed.”

During the proceedings, the court did not address whether Heart and his companies engaged in the sale or offering of securities under SEC jurisdiction, but merely established that they exceeded the powers granted by the U.S.

“Heart’s contacts on the website were not ‘active.’ The complaint does not allege that he conducted transactions, collected credit card data, or entered into contracts with U.S. investors through his websites,” the ruling states.

At the conclusion of the session, the court dismissed the lawsuit and granted the SEC 20 days to file an amended complaint addressing jurisdictional deficiencies.

According to the 2023 complaint, the regulator accused Heart of raising over $1 billion through unregistered cryptocurrency offerings via the HEX, PulseChain, and PulseX projects. He is also accused of participating in artificially inflating token trading volumes and misappropriating funds.

Back in late 2024, Interpol issued a “red notice” on behalf of Finland for Heart. Authorities are seeking him for alleged tax evasion and assault.