On Friday, a federal judge in Brooklyn dismissed a lawsuit brought by U.S. securities regulators against online entrepreneur Richard Heart, who had been accused of orchestrating unregistered cryptocurrency offerings that raised over $1 billion and defrauded investors of $12.1 million. The lawsuit claimed that Heart, also known as Richard Schueler, promoted various tokens and trading platforms as paths to high wealth.
Judge Carol Bagley Amon noted the lack of a direct link between Heart's alleged actions and the United States, given that he is a U.S. citizen living in Finland. The Securities and Exchange Commission (SEC) alleged that Heart misled investors about the nature of his offerings and misused funds on extravagant purchases, such as luxury cars, expensive watches, and a large black diamond.
Amon ruled that the statements made by Heart were aimed at a global audience, not specifically at U.S. investors, and the SEC did not prove that he engaged in transactions with U.S.-based investors through his online platforms. The judge highlighted that any misappropriation of funds occurred overseas through digital wallets and crypto platforms without ties to the United States.
In response to the ruling, a spokesperson for Heart expressed satisfaction with the decision, stating that it brings relief and opportunity to the cryptocurrency space. The SEC did not provide a comment on the ruling.