A U.S. federal judge has dismissed the Securities and Exchange Commission’s lawsuit against HEX founder Richard Heart, ruling that the agency failed to establish jurisdiction over his crypto-related activities. The decision, issued on Feb. 28, 2025, marks a significant setback for the SEC in one of its more prominent crypto enforcement efforts and could shape how American securities laws are applied to offshore digital asset projects.
A High-Profile Case Falls on Jurisdictional Grounds
The SEC had accused Heart, a Finland-based entrepreneur, of conducting unregistered securities offerings through HEX, Pulsechain, and PulseX. According to the regulator, the projects raised more than $1 billion. The agency also alleged that Heart misappropriated roughly $12 million for luxury purchases, including high-end sports cars and a 555-carat diamond. The case stood out as one of the SEC’s most closely watched actions in the crypto sector because it combined allegations of unregistered offerings, large fundraising totals, and personal spending.
Despite the scale of the claims, the court did not reach the broader merits of whether the offerings should be treated as securities under U.S. law. Instead, the case was dismissed because the SEC could not demonstrate that Heart had sufficiently targeted the United States or American investors in a way that would justify federal jurisdiction.
The Court’s Reasoning
Judge Carol Bagley Amon concluded that the SEC had not shown that Heart’s communications and promotional activity were deliberately directed at the U.S. market. A central part of the court’s reasoning was that Heart’s online statements and content were globally accessible, but global availability alone does not prove that a foreign defendant specifically solicited U.S. participants.
The court also stressed that the mere presence of U.S. investors was not enough to create jurisdiction. That point carried particular weight because the tokens at issue were not listed on U.S. exchanges, weakening the SEC’s argument that the projects had meaningful domestic market connections. In effect, the ruling drew a sharper line between projects that are simply accessible from the United States and those that are intentionally marketed into the country.
This distinction matters in crypto more than in many traditional financial cases. Digital asset projects often operate online, serve globally distributed communities, and rely on networks that are not confined to one legal territory. The court’s decision suggests that U.S. regulators may need stronger evidence of direct domestic targeting before bringing enforcement actions against foreign crypto founders and platforms.
Why the Decision Matters for Crypto Regulation
The dismissal could have broader implications for the SEC’s cross-border enforcement strategy. For years, the agency has argued that many token offerings and crypto-related fundraising schemes fall within the scope of U.S. securities laws. But when the people behind those projects are based abroad and the tokens are not clearly connected to U.S. trading venues, jurisdiction becomes a more complicated threshold issue.
Legal observers say the ruling may serve as an important reference point for future cases involving decentralized platforms and internationally structured crypto ventures. If a project does not explicitly court American investors, does not list its tokens on U.S. exchanges, and operates from outside the country, the SEC may face a tougher path in trying to bring such entities under U.S. legal authority.
That does not mean foreign crypto projects are beyond regulatory reach. Rather, the ruling indicates that courts may require more concrete evidence of U.S.-focused conduct. In practical terms, the SEC may need to show targeted advertising, U.S.-specific promotional campaigns, direct domestic investor outreach, or other facts tying the activity to the American market.
Appeal Window and Political Context
The SEC reportedly has 20 days to appeal the decision. Whether it chooses to do so may depend not only on the legal merits but also on broader enforcement priorities under a new administration. Crypto policy in the United States has shifted repeatedly in recent years, with regulators balancing investor protection concerns against criticism that aggressive enforcement can create uncertainty for innovation and drive activity offshore.
The timing is also notable because the Heart case follows a series of recent SEC retreats or dismissals involving major crypto names such as Uniswap, OpenSea, Gemini, Coinbase, and Robinhood. Taken together, those developments may signal a changing regulatory mood, or at least a recognition that some of the agency’s legal theories face tougher scrutiny in court.
A Reminder of Crypto’s Borderless Nature
At a broader level, the decision highlights one of the most persistent challenges in digital asset regulation: crypto markets are inherently borderless, while securities laws remain rooted in national jurisdiction. Projects can be developed in one country, promoted online to a worldwide audience, and used by participants from dozens of jurisdictions without maintaining a conventional physical footprint in any one market.
That reality creates friction for regulators trying to apply existing legal frameworks to decentralized or internationally distributed systems. The dismissal of the SEC’s case against Richard Heart underscores that jurisdiction is not a procedural footnote in crypto litigation—it can be the decisive issue. Before a court even addresses whether a token is a security or whether misconduct occurred, regulators must first establish that the case properly belongs in a U.S. courtroom.
For the crypto industry, the ruling is likely to be read as a meaningful limitation on expansive enforcement theories, especially in cases involving offshore founders and globally accessible platforms. For regulators, it is a reminder that internet reach and U.S. investor participation, by themselves, may not be enough. The next phase of crypto enforcement may depend as much on proving territorial nexus as on proving securities violations.