Background of the SEC and Richard Heart’s Case And the Dismissal Motion
Last week, Heart’s legal team filed a motion to dismiss the case, arguing that Heart lives outside the U.S. and did not offer products to American citizens.
Heart’s lawyers argued that the SEC failed to demonstrate any connection between Heart and the United States. The SEC didn’t provide evidence of US-based entities, employees, or contracts. There was also no evidence of marketing efforts targeting the US or travel by Heart representatives to the US.
In response, the SEC has asked the U.S. District Court for the Eastern District of New York to reject Heart’s motion for a dismissal.
Heart’s Lawyers Defense’s Arguments on HEX, PulseChain, and PulseX
In contrast to the SEC claims, Heart’s lawyers argue that HEX, PulseChain, and PulseX are decentralized blockchain technologies, not investment contracts classifiable as securities. They draw comparisons between HEX and bitcoin, which the SEC has not classified as a security.
Heart’s lawyers wrote, “Hex was built as a superior alternative to bitcoin designed to ‘outperform’ it,” the lawyers said. “Like bitcoin — which the SEC has conceded is not a security — Hex is not alleged to have any actual or intended functionalities other than the mechanics built into its software code. The Complaint does not allege that individuals were meant to do anything with their Hex tokens other than hold them in their digital ‘wallets’ on the ethereum network and use the aforementioned software functions.”
The defense maintains that HEX token holders were not required to do anything beyond using certain software features.
Amidst this legal battle, cryptocurrency influencer Ben Armstrong, known as BitBoy, has defended HEX, claiming the project is not a scam. Armstrong pointed out that HEX’s staking model has consistently rewarded users, even amid the legal challenges facing its founder.
Addressing the upcoming proceedings, Richard Heart took to Twitter to share his perspective, saying, “Next up, oral arguments, Oct. 24th”
“Code is speech. Blockchains are speech. Speech is a protected human right. Freedom of movement and assembly are also protected human rights,” he added.
