A U.S. federal judge has thrown out the Securities and Exchange Commission’s (SEC) fraud lawsuit against Richard Heart, the founder of Hex, citing jurisdictional issues. The case accused Heart of illegally raising over $1 billion through unregistered crypto offerings and misusing $12.1 million in investor funds to buy luxury items, including the world’s largest black diamond.

Judge Carol Bagley Amon ruled on Feb. 28 that the SEC failed to prove that Heart’s crypto dealings fell under U.S. jurisdiction. She noted that his alleged fraudulent activities occurred on global crypto platforms with no direct ties to the United States. The judge emphasized that any alleged misappropriation of funds through mixer transactions happened outside U.S. borders.

Following the ruling, the crypto tokens involved—PulseChain (PLS), PulseX (PLSX), and HEX—surged in value, gaining 36%, 67%, and 78%, respectively. Heart celebrated the decision, calling it a rare victory over the SEC and a positive moment for the broader crypto industry. He highlighted that HEX has operated without issue for over five years.

However, the SEC still has a chance to fight back. The court has given the regulator until March 20 to amend its complaint and refile the case.

Despite the legal win, Heart’s troubles are far from over. Finnish authorities arrested him in September 2024 on charges of tax fraud and assault, but he has since disappeared. In December, Interpol issued a Red Notice for his arrest. Meanwhile, Finnish officials seized $2.6 million worth of abandoned luxury watches linked to him.

Though authorities have been unable to locate Heart, he remains active on social media, promoting his cryptocurrencies on X and YouTube.