Richard Heart has been accused by the Securities and Exchange Commission of scamming investors of $12 million to purchase items like a 555-carat black diamond and executing unregistered offers of Hex crypto asset securities that collected more than $1 billion.
The watchdog accused Hart (also known as Richard Schueler) and three unincorporated businesses he controls, Hex, PulseChain, and PulseX, of executing the unregistered offerings in a complaint submitted to a federal court in Brooklyn.
In 2018, the complaint claims, Heart started marketing Hex crypto on the pretense that it was the first high-yield “blockchain certificate of deposit,” and it also started endorsing tokens as an avenue for making people “rich.”
In an alleged unregistered sale, Heart and Hex allegedly offered and sold Hex crypto tokens, raising more than 2.3 million Ethereum, including through so-called “recycling” transactions that allowed Heart to covertly acquire more Hex tokens.
The SEC claims that Heart arranged two more unregistered crypto asset securities sales between 2021 and 2022, each of which raised hundreds of millions of dollars more in crypto assets.
In addition, the SEC accuses Heart and PulseChain of defrauding investors by using at least $12 million of the proceeds from their offering to buy opulent items such sports cars, watches, and “The Enigma,” allegedly the largest black diamond in the world, which he spent over $4 million for at auction.
“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,” says the SEC’s Eric Werner.
