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SEC Crypto Bombshell: Richard Heart, The World’s Largest Black Diamond, & The SEC’s Wrath

July 31, 2023 , min read


Key takeaways:

  • Richard Heart, of Hex, PulseChain, PulseX, is accused by the SEC of the  unregistered sale of crypto assets worth over $1 billion.
  • The SEC's action against Heart and his businesses is part of a broader regulatory focus on the crypto asset industry.
  • The SEC also claims Heart missapropriated funds to purchase a 555-carat black diamond called "The Enigma" - purportedly the largest black diamond in the world.

So here we are.

Crypto King Pin, Richard Heart (HEX, PulseChain, PulseX, and well-known Crypto YouTuber), has just been named in this SEC complaint.

The U.S. Securities and Exchange Commission (SEC) - which regulates financial markets in the US - has filed a legal complaint on July 31st, 2023 against Richard Schueler, AKA Richard Heart, which alleges that Heart and his three businesses, Hex, PulseChain, and PulseX, raised over $1 billion by selling unregistered crypto assets to everyday investors, both in the U.S. and abroad. 

Sales of securities in the US are required by law to be registered with the SEC:

Under the federal securities laws, every offer and sale of securities, even if to just one person, must be either registered with the SEC or conducted under an exemption from registration. This is true for companies of all sizes, private and public alike, and includes sales made to anyone, including friends, family, angel investors, and venture capital funds. - Source: SEC.gov

The SEC further claims that Heart carried out three separate offerings (ICOs), each involving a crypto asset, and that PulseChain and PulseX are platforms for these crypto assets that Heart himself created. 

A Black Diamond Called "The Enigma"

Here's one of the more interesting details, from Page 20, Paragraph 63 - I'll quote the document directly: 

"In additional transactions occurring after the Mixer transfers, Heart misappropriated approximately $5 million of PulseChain investor assets, sending a majority of the assets to Sotheby’s in February 2022 to purchase a 555-carat black diamond called “The Enigma,” purportedly the largest black diamond in the world. Heart purchased the diamond for £3,161,000 ($4.28 million at the time of the transaction), funding the purchase by transferring both ETH and fiat currency to Sotheby’s" 

Apparently the purchase was funded by transferring Ethereum and fiat currencies directly to Sotheby's. 

Black Diamond Enigma

The infamous black diamond, "The Enigma", thought to be the largest black diamond in the world. Screenshot sourced from Sotheby's.com.

According to the allegations, Heart had given investors the impression that their funds would be used to develop PulseChain, but instead the funds were used fund personal luxury purchases, including the black diamond, expensive watches, and high-end automobiles. The misappropriation of funds is part of the SEC's complaint against Heart. 

This is truly wild stuff - who knew this diamond even existed? 

I used ChatGPT to scan the entire 27-page PDF to extract the most relevant information and summarize the complaint for you.


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Summary of the SEC complaint against Richard Heart:

  • The SEC has filed a legal complaint against Richard Heart and his three businesses: Hex, PulseChain, and PulseX.
  • Heart and his businesses are accused of raising over $1 billion by selling unregistered crypto assets to everyday investors.
  • Heart promoted these investments as a way to make a lot of money, with one of them, Hex, claimed to be the most profitable asset ever.
  • The SEC claims that Heart carried out three separate offerings, each involving a crypto asset.
  • PulseChain and PulseX are platforms for these crypto assets that Heart himself created.

Noteworthy Highlights From The SEC's Complaint

Some of the more interesting complaints can be found on Page 19, paragraphs 62 and 63: 

  1. Heart misappropriated at least $12.1 million of PulseChain investor assets between August 3, 2021, and September 22, 2022, to fund his purchases of luxury goods, including cars and watches.
  2. On August 3, 2021, Heart spent $337,642 of PulseChain investor assets on the purchase of a luxury car from a European luxury car dealer.
  3. On August 24, 2021, Heart transferred another $534,916 to the same luxury car dealer for the purchase of a McLaren sports car.
  4. On August 29, 2021, Heart purchased a 2020 white Ferrari Roma for $314,125.
  5. From January 2022 through March 2022, Heart also purchased five watches in separate transactions. These included: 
    • A $285,799 Rolex Submariner Oyster
    • A $550,000 Rolex Daytona Eye of the Tiger
    • An $800,000 Rolex GMT – Master II
    • Another Rolex watch for $1.38 million
    • Another watch for $419,192

About the author 

Sam Rexford

Hey! I'm Sam Rexford, owner at ChillReptile.com. I'm a 9-5 escape artist, dad, and entrepreneur. I write about escaping legacy systems with online businesses, software, emerging technology, cryptocurrencies, investing, and a ton more. You can learn more about our mission here.

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