The U.S. Securities and Exchange Commission (SEC) has officially closed its legal proceedings against Richard Schueler, better known in the cryptocurrency community as Richard Heart. In a decisive letter directed to New York District Court Judge Carol Bagley Amon, shared by Heart on X, the SEC announced that it “does not intend to file an amended complaint,” effectively solidifying the court’s prior dismissal of the case.
This litigation stemmed from a July 2023 lawsuit by the SEC, accusing Heart of raising over $1 billion through unregistered securities offerings associated with his crypto ventures, namely Hex (HEX), PulseChain (PLS), and PulseX (PSLX). The allegations also suggested that Heart diverted investor funds for extravagant personal purchases, including luxury cars and high-end watches, while promoting his project tokens as pathways to “grandiose wealth.”
However, the lawsuit’s narrative took a significant shift when, in February, Judge Amon dismissed the complaint, citing the SEC’s inability to demonstrate that Heart’s actions were aimed specifically at U.S. investors. Although the SEC was given an opportunity to amend and refile its charges, the Commission opted to withdraw entirely from the case.
This decision reflects a broader trend within the SEC, particularly under the newly appointed administration. Since the departure of former chair Gary Gensler in January, the SEC has started to retract several high-profile lawsuits against various crypto companies, including well-known names like Coinbase and Kraken.
Celebrating the SEC’s dismissal, Heart stated that HEX, PulseChain, and PulseX have achieved a significant victory, declaring it a win for open-source software, cryptocurrency, and free speech. Heart emphasized that the case could have established a negative precedent, potentially causing vast damage to the open-source and free software industry that underpins much of the Internet today.
Despite this legal triumph, it is noteworthy that Heart remains on Interpol’s Red Notice list due to ongoing investigations regarding alleged tax evasion spanning four years and an assault claim involving a minor. As of now, the Red Notice is still active, and Heart continues to appear on Europe’s most wanted list.
- Regulatory Clarity: Heart’s case represents a move towards clearer regulatory landscapes for cryptocurrency projects.
- Industry Trends: The SEC’s retreat may indicate a shifting attitude towards regulation in the crypto sector.
- Future Litigations: This dismissal could set a precedent for how the SEC approaches cases involving blockchain technology.
As the cryptocurrency space continues to evolve, the implications of this development on future regulations and litigation in the industry will be closely observed by all stakeholders.
