The Securities and Exchange Commission (SEC) has opposed Hex founder Richard Heart’s move to dismiss the lawsuit against him. The SEC also claimed that the agency has the jurisdiction to continue the lawsuit.

The commission opposed Heart’s request to dismiss the lawsuit, stating that “in his Motion asking the Court to dismiss all the claims against him, Heart disregards the well-pleaded allegations of the Complaint and the applicable law.”

SEC accuses Heart of raising $1B in unregistered securities offerings

Back in 2023, the SEC filed a lawsuit against Richard Schueler, aka Heart, for raising over a billion dollars via unregistered offerings of his crypto projects Hex, PulseChain and Pulse X.

The agency cited in its lawsuit that Heart utilized the investor funds inappropriately to showcase a lavish lifestyle. These include the purchase of designer brands, luxury cars and even a rare black diamond worth well over $4 million.

However, Heart’s lawyers defended him, stating that he hadn’t made any explicit promises to investors. The lawyers mentioned that Heart’s projects were decentralized, like Bitcoin. They also added that Heart resides outside the United States, which puts him outside the jurisdiction of the SEC.

Heart promises up to 38% returns for staking HEX

Standing firm on their lawsuit, the SEC highlighted Heart’s presence at various in-person and virtual events in the US and his marketing efforts to target US investors. The SEC lawyers stated, “Heart cannot avoid the Court’s jurisdiction by simply relying on the fact that he lives abroad.”

The regulator also pinpointed the HEX token’s staking mechanism. As per the statement from the SEC, Heart was promoting potential returns up to 38% for staking the HEX token.

Talking about the scale of investment, the SEC stressed that investors had poured in over $354 million in PulseChain.

As per the latest data from CoinMarketCap, Pulsechain (PLS) is down 88.5% from its all time high in May 2023. HEX is also facing a similar fate, as the token is down by over 84% from its ATH. The lawsuit alleging these tokens are securities has also taken a toll on their value.