Richard Heart, a crypto influencer, is being sued by the Securities and Exchange Commission on allegations that he spent “at least” $12 million of the proceeds from his crypto products on high-end goods. That includes investing on sports cars, expensive watches, and a 555-carat black diamond known as The Enigma that is purported to be the biggest in the world.
Heart is a Finnish citizen who was born in the United States. Since 2017, he has run a YouTube channel where he advertises his own cryptocurrency goods, such as the Hex token and PulseChain, which is based on the PulseX protocol and is a sister product of Hex.
The SEC claims that Heart raised over $1 billion through his unregistered Hex, PulseChain, and PulseX cryptocurrency securities in its case. The SEC contends that Heart promoted his wares as a means for investors to achieve extravagant wealth and promoted claims that Hex was designed to be the greatest appreciating asset ever created in human history.
The SEC contends that despite Heart’s assertions that the investments in his products were made to support free speech, he never disclosed that he had really used millions of dollars from PulseChain investor funds to purchase luxuries for himself. Among them are a $1.38 million Rolex watch, a $314,125 Ferrari Roma, and a $534,916 McLaren sports car. He allegedly spent $5 million of the assets of investors in February 2022 to buy The Enigma.
In addition, the lawsuit claims that Heart accepted approximately 2.3 million Ethereum worth over $678 million in exchange for Hex tokens between December 2019 and November 2019. But according to the SEC, 94 to 97 percent of these ETH deposits were recycling transactions that let Heart and other insiders possess a lot of Hex tokens while also giving the impression that there was a lot of trading volume and genuine demand.
In offerings that he failed to register, Heart urged investors to purchase securities backed by cryptographic assets. Eric Werner, the director of the SEC’s Fort Worth regional office, said that after defrauding those investors, he used part of their cryptocurrency assets to purchase extravagant luxury items. The goal of this lawsuit is to safeguard the investing public and make Heart responsible for his deeds.
This comes after a string of litigation filed by the SEC over the past few months. In addition to filing a complaint against Binance and its CEO Changpeng Zhao, the SEC is also pursuing legal action against Coinbase and Tron creator Justin Sun. But of all these lawsuits, this one sticks out due to the sheer number of luxurious products that Heart (supposedly) spent money from investors on.
