Richard Heart wins legal battle against SEC – temporarily

Richard Heart, the founder of the controversial crypto project HEX, celebrates a surprising legal victory: the U.S. Securities and Exchange Commission (SEC) announced on April 21, 2025, that it will not refile its fraud case against the former child star. A federal court had already dismissed the charges on February 28 of the same year. On platform X, Heart portrayed himself as a big winner, claiming HEX had achieved a triumph few other crypto ventures could boast.

But this apparent success warrants a closer look. The legal victory is less based on substantive exoneration and more on a procedural detail: the SEC’s lack of jurisdiction. Judge Carol Bagley Amon concluded that the SEC had not proven Heart operated within the United States. The ruling was based on the argument that HEX’s price claims reached a global audience and were not targeted specifically at American investors.

The SEC Allegations Against Richard Heart and His Ecosystem

In July 2023, the SEC filed charges against Heart, whose real name is Richard James Schueler. The agency accused not only the man himself but also his three crypto projects: HEX, the Layer-1 blockchain PulseChain, and PulseX, the associated decentralized exchange. The SEC alleged securities fraud and claimed registration requirements had been violated.

The accusations were serious. According to the regulator, Heart used misleading promises to lure investors into HEX. The SEC highlighted especially the claims of extreme returns—Heart claimed HEX could generate enormous annual percentages. At the same time, authorities argued that Heart employed a typical multi-level marketing scheme, where early investors could earn additional profits by recruiting new participants.

Flaunting Wealth: Heart’s Lifestyle and Criticism

A particularly notable aspect of the SEC complaint was the list of Heart’s spending habits. The crypto evangelist reportedly spent around $12 million from HEX proceeds on luxury goods—including designer watches, sports cars, and even a 555-carat diamond ring. This public display of wealth has become part of Heart’s brand identity. In a video posted on X, he showed Louis Vuitton suitcases filled with dozens of valuable watches, valued at approximately €9 million.

Critics argue that this ostentatious display of wealth is typical of scammers trying to gain the trust of potential victims. The conspicuous consumption appears linked to Heart’s business model, which is based on the belief that investors can become rich by participating in HEX—a classic Ponzi scheme promise.

The Turning Point: Jurisdiction Instead of Innocence

Heart’s real secret to success was not a factual refutation of the SEC’s claims but a clever legal move by his attorneys. During the proceedings, Heart’s legal team filed a motion to dismiss, arguing that the SEC could not prove Heart or his projects conducted business activities within the United States.

Judge Amon agreed. She ruled that SEC regulations target activities within the U.S. The “alleged misappropriation” occurred via digital wallets and crypto platforms “with no claimed connection to the United States,” as she stated in her written opinion. Heart’s residence outside the U.S.—he does not live on American soil—became the decisive factor.

This aspect has broad implications for the crypto industry: the court’s decision could set a precedent that the SEC’s authority is limited when it comes to crypto companies operating outside U.S. borders.

European Investigations: A Persistent Opponent

While Heart managed to sidestep the SEC, he remains under heavy pressure in Europe. Finnish authorities have launched investigations against him, focusing on tax evasion and assault. In September 2024, Helsinki media reported that Finnish police had taken Heart into custody in his absence.

The investigation was initiated by Finnish tax authorities. Investigators found that Heart’s income disclosures did not match the estimates of the tax office. Police detective Harri Saaristol commented on the severity of the charges: due to the “substantial amount of money” involved and the “long-term and planned nature of the activity,” there are “grounds to suspect gross tax evasion.”

As part of the investigation, police confiscated luxury watches worth millions from an apartment in Espoo near Helsinki—a direct attack on the wealth image Heart had publicly cultivated.

Europol’s Wanted Profile: Also Violence Allegations

Even more serious are the violence allegations listed by Europol. The European police agency has Heart (under his birth name Schueler) listed as wanted for assaulting a minor. According to Europol, Heart allegedly “physically attacked a 16-year-old victim by grabbing his hair, pulling him down the stairs, and throwing him to the ground.”

These allegations have placed Heart not only on Europol’s wanted list but also on Interpol’s. Ongoing investigations suggest that his legal troubles are not limited to the SEC case but continue to unfold across Europe.

The Ponzi Problem: Has HEX Really Become Safer?

Heart’s claim that HEX has achieved “regulatory clarity” due to the SEC defeat—“something almost no other coin has”—is questionable. Many industry analysts and observers have long classified HEX as a Ponzi scheme. The reasons are compelling:

First, HEX promises an unusually high annual return of about 38 percent—a promise that is mathematically unsustainable. Second, the profit system relies on recruiting new users, a classic hallmark of pyramid schemes. Third, Heart himself owns about 90 percent of the HEX tokens, placing him in a position to benefit massively from new investments.

The market seems to share these concerns. Although HEX’s price briefly rose after the SEC ruling was announced, it has since stagnated. At the time of the latest report, HEX was trading at around $0.002253, with 24-hour trading volumes below $250,000—indicating a lack of confidence and weak market activity.

A Pyrrhic Victory for the Crypto Industry?

Richard Heart’s victory against the SEC may be seen as a turning point in the regulation of the crypto industry. However, the court’s decision more clearly exposes the limits of SEC authority in the global digital space than it affirms HEX’s legitimacy. The SEC did not lose because Heart was innocent, but because a court determined that the agency lacked the proper jurisdiction.

For Heart personally, this victory provides temporary relief. However, it only removes a legal obstacle—European authorities and more serious charges still loom. The question remains how long he can sustain HEX in this new situation and whether this victory truly makes HEX holders “safer,” as Heart claims.