Crypto founder sued for using funds on luxury purchases—including a $4.3 million black diamond


The Securities and Exchange Commission charged crypto influencer Richard Heart on Monday with raising more than $1 billion in unregistered securities and using investor proceeds to make lavish purchases, including a rare 555.55-carat black diamond believed to have originated from outer space—the latest crypto project to face an SEC suit.
Hex is one of three crypto entities led by Heart. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images) SOPA IMAGES/LIGHTROCKET VIA GETTY IMAGES
Key facts
  • The SEC alleged Heart illegally raised more than $1 billion from three of his crypto entities—Hex (an Ethereum-based token), PulseChain (a blockchain) and PulseX (a decentralized crypto exchange)—all of which, like Heart, were charged with conducting unregistered offerings of crypto asset securities.
  • The SEC also charged Heart with fraud for allegedly spending at least $12 million in investor funds on sports cars, watches and The Enigma—the largest cut diamond in the world, which was sold at auction for US$4.3 million last year.
  • Heart’s Hex cryptocurrency is trading down more than 25% as of Monday afternoon at a fraction of a cent, according to Coinbase.
  • The lawsuit said Heart repeatedly claimed investments in his crypto entities would make investors rich, “claiming that Hex, for example, ‘was built to be the highest appreciating asset that has ever existed in the history of man.’”
  • Heart allegedly did not disclose that investor funds were being used toward luxury purchases, which reportedly included a Rolex watch purchased for $1.38 million, a $534,916 McLaren sports car and several other watches and automobiles.
  • The lawsuit further claimed that Heart tried evading securities laws by asking investors to “sacrifice” their crypto assets in exchange for PulseChain and PulseX tokens, which has been documented in multiple videos on Heart’s YouTube channel.
  • Heart did not immediately respond to a request for comment.
Crucial quote

“I want to be – I want to have the best performing asset that’s ever existed,” Heart said in a January YouTube video cited by the SEC. “I want to be the best crypto founder that’s ever existed… I like owning the world’s largest diamond. I like having a coin that went up a million percent that’s had 3 years of flawless operation, that’s never been hacked. The front end has never gone down.”

Key background

Heart, 43, was born in the U.S. and currently resides in Finland. Heart is active on social media and owns a YouTube channel with more than 150,000 subscribers.

The channel contains music videos, content that promotes Heart’s crypto entities and shows his luxury clothing purchases.

Several crypto figures have faced legal pressure from the SEC, which argues most cryptocurrencies aside from bitcoin are securities under U.S. law, so crypto firms need to follow the same regulations as traditional financial firms.

The agency sued Binance—the world’s largest crypto exchange—last month, alleging founder Changpeng Zhao misappropriated customer funds in some cases by diverting them to a separate trading entity.

Binance allegedly moved billions of dollars to Merit Peak, another company controlled by Zhao. The SEC is also suing competing exchange Coinbase.

In March, Tron founder Justin Sun was charged by the SEC over fraud and other securities violations. 

The SEC claimed Sun sold unregistered securities, participated in market manipulation and conducted a scheme to pay celebrities to promote cryptocurrencies without disclosing their compensation.

And Sam Bankman-Fried, the founder of bankrupt crypto exchange FTX, was charged with fraud late last year.


The black diamond mentioned in the SEC’s lawsuit against Heart is reportedly the largest cut diamond in the world that has come to auction, according to Guinness World Records.

The 555.55-carat diamond was sold by Sotheby’s last year for $4.28 million at auction, excluding the buyer’s premium.

This article was first published on and all figures are in USD.

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