In a rare legal defeat for the US Securities and Exchange Commission, the Agency has formally dropped its fraud against Richard Schueler, better known as Richard Heart, founder of Crypto Projects Hex, Pugeschain and Pulsex.
On April 21, the Sec Eastern District Court of New York informed that it would not change its complaint and effectively end the case.
“It ends the case with a complete victory for Mr. Heart,” said David Kirk, partner at Kirk & Ingram LLP, who represented the Hex founder in an E email to Coindesk. “As far as I know, this is the only SEC enforcement action against a participant in the cryptocurrency industry that was rejected in its entirety by a federal judge.”
The court had previously rejected SEC’s original complaint in February with reference to a lack of jurisdiction.
Judge Carol Bagley Amon noted that Heart’s activities were not clearly targeted at US investors, Coindesk previously reported, undermined SEC’s case.
“This is a victory for open source software, cryptocurrency and freedom of speech. Sec actually defended the software code in this case and claimed it could be an altar ego of a person,” heart posted on X. “This would have set a terrible precedent and caused perhaps several billion of dollars of dollars of damage to the vital source and free software industry, the internet and your talk about it. ”
Although the regulator was given the opportunity to change the complaint, it refused to do so before the extended deadline on April 21.
SEC had initially brought a case in July 2023 and accused HEART of raising over $ 1 billion through unregistered Safe Authority.
