tl;dr
A federal judge dismissed the SEC's lawsuit against crypto entrepreneur Richard Heart, citing lack of personal jurisdiction over the Finland-based U.S. citizen. The judge ruled that the SEC failed to demonstrate sufficient U.S. contacts related to Heart's crypto projects Hex, PulseChain, and PulseX....
A federal judge has dismissed the SEC's lawsuit against crypto entrepreneur Richard Heart due to lack of personal jurisdiction over the Finland-based U.S. citizen. The judge ruled that the SEC failed to demonstrate sufficient U.S. contacts related to Heart's crypto projects Hex, PulseChain, and PulseX. The court rejected the SEC's argument based on Heart's virtual appearances at U.S. conferences and granted the SEC 20 days to file an amended complaint addressing jurisdictional deficiencies.
In December, Interpol issued a red notice for Heart, but clarified it is not an international arrest warrant, leaving individual countries to decide whether to act on it.
District Judge Carol Bagley Amon found that the SEC didn't demonstrate Heart had sufficient contacts with the U.S. related to his crypto projects Hex, PulseChain, and PulseX. The court rejected the SEC's argument that Heart's virtual appearances at U.S. conferences established jurisdiction, noting that his presence "focused on a different post-offering asset" and doing so was "insufficient to establish personal jurisdiction."
The SEC alleged that Heart conducted unregistered crypto offerings, used deceptive "recycling" transactions to gain more tokens, falsely marketed high staking returns, and tried to evade securities laws by framing investments as "sacrifices." The SEC also claimed that Heart misappropriated "at least $12.1 million of PulseChain investor funds for personal luxury purchases, including a 555-carat diamond, expensive watches, and high-end automobiles."
Despite those allegations, Judge Amon determined that Heart's online activities weren't specifically directed at U.S. investors. "The relevant online communications described in the Complaint during the offer periods consist of untargeted, globally available information," the ruling reads.
In December, Interpol issued its red notice for Heart, which is "a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action." However, it is not an international arrest warrant, and it remains up to individual countries to decide whether to act on it.
Judge Amon has granted the SEC 20 days to file an amended complaint addressing the jurisdictional deficiencies.