In an unusual setback for the U.S. Securities and Exchange Commission (SEC), the agency has officially dropped its fraud case against Richard Schueler, who goes by Richard Heart, the founder of HEX, PulseChain, and PulseX. The SEC notified the Eastern District Court of New York on April 21 that it would not revise its complaint, concluding the case.

Key Points:

• The SEC has terminated its fraud proceedings against Richard Heart, who leads several high-profile crypto projects.
• The complaint was dismissed after the SEC did not choose to amend it before the April 21 deadline.
• A federal judge had refused the SEC’s initial complaint due to jurisdiction issues.

In February, a court had already dismissed the SEC’s original complaint, stating that Heart’s activities weren’t clearly directed at U.S. investors, which weakened the SEC’s argument.

Heart commented, “This is a win for open-source software, cryptocurrency, and freedom of speech. The SEC dares to sue software code itself, claiming it could represent a person, which could lead to disastrous consequences for the invaluable open-source and free software sectors that sustain much of the Internet.”

The initial suit from the SEC was filed in July 2023, alleging that Heart amassed over $1 billion through unregistered securities sales.