'World's Largest Black Diamond Was Bought Through Illegal Crypto,' Claims US Govt Agency SEC

The US Securities and Exchange Commission on Monday sued an entrepreneur Richard Schueler (who goes by Richard Heart) and his three crypto projects¡ªHex, PulseChain, and PulseX¡ªfor allegedly raising more than $1 billion by offering unregistered securities.

He has also been accused of using a part of that illegal funding to buy The Enigma, the world's largest black diamond.

World's Largest Black Diamond Bought Through Illegal Crypto

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In the lawsuit, the SEC alleges Schueler used at least $12 million of the proceeds to buy himself a suite of luxury goods: nearly $7.2 million worth of luxury cars and watches, including a 2020 white Ferrari Roma and a Rolex Daytona Eye of the Tiger, and almost $5 million paid to Sotheby¡¯s for ¡°The Enigma,¡± a 555-carat black diamond said to be the largest in the world.

¡°Heart called on investors to buy crypto asset securities in offerings that he failed to register. He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods,¡± Eric Werner, director of the SEC¡¯s Fort Worth office, said in a statement, as per a Fortune report. ¡°This action seeks to protect the investing public and hold Heart accountable.¡±

This is what SEC tweeted:

Today we charged Richard Heart (aka Richard Schueler) and three unincorporated entities that he controls, Hex, PulseChain, and PulseX, with conducting unregistered offerings of crypto asset securities that raised more than $1 billion in crypto assets from investors.

¡ª U.S. Securities and Exchange Commission (@SECGov) July 31, 2023

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Also Read: US Man Wakes Up To See $20 Crypto Investment Turn Into Trillions

What The Accused Crypto Influencer Has Said

¡°The things that I¡¯m designing are designed to be the pinnacle of their field,¡± the accused crypto influencer said in a video posted to his website.

In March, Schueler began to pare back his social media presence, deactivating his Instagram profile to ¡°show more humility and respectfulness.¡±

To show more humility and respectfulness I've deactivated my Instagram account.

¡ª Richard Heart (@RichardHeartWin) March 7, 2023

A YouTube streamer and crypto personality, Heart began marketing Hex in 2018, according to the SEC, claiming that it was the first high-yield ¡°blockchain certificate of deposit.¡± He engaged in three separate offerings of ¡°crypto asset securities,¡± the SEC alleges, one for Hex, one for PulseChain¡ªwhat Heart said was a layer-1 fork of Ethereum¡ªand then another for PulseX, a DeFi protocol. HEX, PLS, and PLSX, respectively, were the associated tokens.

The action against Heart and his crypto projects follows a series of blockbuster lawsuits from the agency against much larger firms and industry players.

After the collapse of FTX in November, the SEC has already sued Gemini, Genesis, Bittrex, Tron, and the company behind TerraUSD, among others. The US government has also targeted the biggest names in the industry, with lawsuits against Coinbase, the largest U.S.-based crypto exchange, and Binance too.

Now it remains to be seen what further action is taken against Richard Schueler, and whether he ends up in jail or gets away with a hefty fine or penalty.

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