In a recent court decision, a lawsuit filed by the United States Securities and Exchange Commission (SEC) against Richard Heart, founder of the cryptocurrency Hex, was dismissed. The SEC had accused Heart, whose legal name is Richard Schueler, of raising over $1 billion through unregistered crypto offerings and defrauding investors out of more than $12 million. The court, led by Judge Carol Bagley Amon, ruled against the SEC on the grounds of jurisdiction, stating that Heart’s activities were global and did not specifically target investors in the United States.
In separate legislative news, Illinois Senator Dick Durbin introduced new legislation aimed at combating fraud in the burgeoning crypto ATM industry in the United States. Highlighting an increasing trend of scams involving the country’s 30,000 crypto ATMs, Durbin announced the Crypto ATM Fraud Prevention Act. This proposed law intends to protect consumers, particularly senior citizens, by requiring ATM operators to alert users to potential scams and implement steps to mitigate fraud losses.
Additionally, the cryptocurrency exchange OKX has conceded to charges by the Department of Justice (DOJ), admitting to operating an unlicensed money-transmitting business. OKX, operated by Aux Cayes FinTech, agreed to a settlement, consisting of $84 million in penalties and the forfeiture of $421 million in institutional client fees, to address violations of US Anti-Money Laundering regulations.
In South Korea, the operator of the Upbit cryptocurrency exchange, Dunamu, has initiated legal proceedings to challenge sanctions imposed by the Financial Intelligence Unit (FIU), a part of the country’s Financial Services Commission. Dunamu is seeking to overturn a partial suspension that prohibits the exchange from onboarding new clients, although existing operations remain unaffected.
Meanwhile, US lawmakers are advancing efforts to repeal the “DeFi broker rule,” a regulation that mandates brokers to report cryptocurrency transactions to the Internal Revenue Service. DeFi Education Fund CEO Miller Whitehouse-Levine criticized the rule as an unconstitutional overreach and urged for its reversal to preserve the US’s position as a leader in financial innovation.
