unregistered securities Archives - Coin Engineer

SEC Won’t Refile Fraud Case Against Richard Heart!

Yigit Taha OZTURK — Wed, 23 Apr 2025 09:00:15 +0000

The U.S. Securities and Exchange Commission (SEC) has announced it will not refile its fraud case against Richard Schueler, better known as Richard Heart, founder of Hex. In an April 21 letter to Judge Carol Bagley Amon, SEC attorney Matthew Gulde stated: “The Commission does not intend to file an amended complaint in this matter.”

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The case was previously dismissed on February 28, after Judge Amon ruled that Heart’s activities were not explicitly targeted at U.S. investors, thus falling outside the SEC’s jurisdiction.

Heart Declares Victory Over SEC

Heart took to X (formerly Twitter) on April 22 to announce that HEX, PulseChain, and PulseX had fully defeated the SEC. He described the case dismissal as a major win for open-source software, cryptocurrency, and free speech, noting that “the SEC actually sued software code itself in this case.”

The SEC originally sued Heart in July 2023, alleging he raised over $1 billion through unregistered securities offerings via HEX, PulseChain (PLS) and PulseX (PLSX).

Despite Interpol issuing a Red Notice for Heart in December 2024, and allegations of tax evasion in Finland, the case has now been dropped without further filings—marking one of the rare complete losses for the SEC in crypto litigation.

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SEC Sues Nova Labs!

Yigit Taha OZTURK — Sun, 19 Jan 2025 11:00:23 +0000

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Nova Labs, the company behind the open-source Helium Network (HNT). This lawsuit comes just days before SEC chair and known crypto critic Gary Gensler steps down on January 20.

Details of the Lawsuit

The SEC alleges that Nova Labs sold unregistered investment products, including electronic devices called “Hotspots”, which mine the company’s cryptocurrency Helium (HNT), and a program called Discovery Mapping, which allows users to trade their private data for crypto assets.

The SEC also accused Nova Labs of misleading potential investors by claiming that major companies such as Lime, Nestlé, and Salesforce were using or relying on its wireless network, allegations the SEC states are untrue.

“Unregistered Securities” in the Crypto World

The term “unregistered securities” is well-known in the crypto world, with several similar lawsuits brought during Gary Gensler’s tenure at the SEC.

However, a significant win for the industry came in July 2023 when the court ruled that XRP’s programmatic sales on digital asset exchanges did not qualify as unregistered securities. Despite this, the SEC quickly filed an appeal to contest the decision.

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SEC’s Future Under New Leadership

With new leadership set to take over at the SEC on January 20, the agency may reportedly reconsider some existing crypto enforcement cases.

According to a January 15 Reuters report, the SEC may review and potentially drop certain cases in the days following the transition.

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SEC Files Final Response in Ripple Lawsuit, Targets XRP, New Stablecoin

admin — Thu, 09 May 2024 06:08:20 +0000

In the ongoing Ripple lawsuit that has been going on for over 3.5 years between Ripple and the SEC, the SEC has submitted its final general evaluation of Ripple to the court. Following the “remedial relief” phase, which is one of the final stages of the litigation process, the court will decide what kind of sanctions, if any, to impose on the defendant, Ripple.

SEC: “They Continue Despite Fair Notice Defense Rejection”

In its evaluation to the court, the SEC also addressed the fair notice defense that Ripple has long relied on, stating that despite the court’s previous rejection of this defense, Ripple is still arguing that there is uncertainty about the status of XRP. The SEC stated that this defense strategy is incorrect and objected to it.

The SEC also alleged that Ripple is still selling XRP unregistered and has failed to fulfill most of its obligations since the initial coin offering in 2013.

Ripple’s New Stablecoin May Also Be at Risk

The SEC also alleged that Ripple wants to issue another unregistered coin, stating that “The company wants to issue another unregistered crypto asset like XRP.”

It is thought that the cryptocurrency mentioned by the SEC is Ripple’s previously announced stablecoin, the details of which have not yet been disclosed. This means that even if this coin is issued, it is likely to be investigated by the SEC.

On the other hand, since the lawsuit is not yet finalized, much of the information and details in the SEC’s response have also been censored by the agency and not released to the public.

Courts Aim to Provide Remedies or Other Legal Solutions to Plaintiffs in the Resolution Process

In the resolution process, the courts aim to provide remedies or other legal solutions to the plaintiff. At this stage, the court decides what kind of sanctions, if any, should be imposed on the defendant to compensate for the plaintiff’s (in this case, the SEC’s) damages and recover unjust gains. However, there is also a possibility that no such decision will be made.

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