A cryptocurrency entrepreneur, Richard Heart, who is also known as Richard Schueler, allegedly used proceeds from a $1 billion crypto fraud to purchase the world’s largest black diamond for over $4 million. Heart is the founder of Hex and marketed the ethereum-based Hex token as the first blockchain certificate of deposit. He promised higher interest rates to users who agreed not to trade or sell their tokens for a specific period of time. Heart attracted users to the token by flaunting luxury items and claiming annual returns as high as 38%. According to Reuters, he described Hex as “the highest appreciating asset that has ever existed in the history of man.”
The Securities and Exchange Commission (SEC) has filed fraud charges against Richard Heart. The SEC alleges that Heart raised more than $1 billion in unregistered crypto securities through Hex, his PulseChain asset network, and the PulseX asset trading platform. It is also claimed that he used around $12 million of investor funds to purchase luxury items such as the Enigma diamond, Rolex watches, and sports cars. Reuters reports that Heart publicly reported the sale of Hex tokens worth $678 million, but it was he and other insiders who were responsible for the majority of the transactions. The SEC alleges that they invested in the cryptocurrency to create the false impression of high demand.
The SEC charges came shortly after Heart expressed frustration with crypto exploiters on Twitter. In his latest YouTube video, where he has over 150,000 subscribers, Heart stated that trusting individuals like himself can lead to being scammed. The SEC is seeking legal action against Heart and his companies, including “injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, penalties, and other equitable relief.” The SEC also urges investors in Hex, PulseChain, or PulseX to provide tips on SEC.gov. Reuters notes that Hex’s price has dropped over 98% since its peak on June 30, and the offerings of PulseChain and PulseX are now considered “practically worthless.”
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