According to Bloomberg, a federal judge in Brooklyn, New York, dismissed the lawsuit filed by the U.S. SEC against cryptocurrency founder Richard Heart, according to Bloomberg. The founder is accused of illegally using millions of dollars in investor funds to buy 555 carat black diamonds. The SEC alleges HeartTong raised more than $1 billion by selling unregistered securities, including Hex tokens and other digital assets associated with its PulseChain blockchain network and PulseX decentralized financial platform. Heart and PulseChain used at least $12.1 million in investor funds to buy personal luxury goods, including diamonds, expensive watches and high-end cars, the agency said in its initial lawsuit. Judge Carol Amon believes the SEC failed to provide enough facts to prove that the actions occurred in the United States, allowing the SEC to modify its complaints to “correct the found defects.”