Crypto Founder Who Made Big Claims Charged in $1B Fraud

SEC: Richard Heart bought $4M black diamond with proceeds from Hex, the 'highest appreciating asset' ever
By Arden Dier,  Newser Staff
Posted Aug 2, 2023 9:19 AM CDT
Crypto Founder Who Made Big Claims Charged in $1B Fraud
The seal of the Securities and Exchange Commission at SEC headquarters, June 19, 2015, in Washington.   (AP Photo/Andrew Harnik, File)

A cryptocurrency entrepreneur who paid more than $4 million for the world's largest black diamond allegedly purchased the rock with proceeds from a $1 billion crypto fraud. The SEC on Monday announced fraud charges against Hex founder Richard Heart, also known as Richard Schueler. Heart marketed the ethereum-based Hex token as the first blockchain certificate of deposit and promised to reward users who agreed not to trade or sell their tokens for a preset time. "The longer lockdown period you choose, the higher interest rate you receive," according to an ad. Heart flaunted luxury items to draw users to the token, while touting annual returns as high as 38%. Hex is "built to be the highest appreciating asset that has ever existed in the history of man," he claimed, per Reuters.

The SEC accuses Heart of raising more than $1 billion in unregistered crypto securities through Hex, his PulseChain asset network, and the PulseX asset trading platform, and of using at least $12 million in investor funds to purchase the luxury items he flaunted, including the 555-carat Enigma diamond, four Rolex watches worth $3 million, and McLaren and Ferrari sports cars, per Reuters. The SEC also claims Heart—a 43-year-old US citizen living in Finland—publicly reported the sale of Hex tokens worth $678 million about a year after the token's 2018 launch, though it was he and other insiders who were behind 94% to 97% of the transactions, per the Verge. They had allegedly invested in the cryptocurrency to create the false impression of high demand.

The charges came a day after Heart complained on Twitter about crypto exploiters, per Quartz. And in the last video shared on his YouTube account, where he counts more than 150,000 subscribers, Heart stated, "I think you should trust me, but if you get in the habit of trusting people like me, you'll get the crap scammed out of you." The SEC is seeking "injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, penalties, and other equitable relief" against Heart and his companies, according to a release. It is also asking investors in Hex, PulseChain, or PulseX to submit tips at As of June 30, Hex's price had fallen more than 98% from its previous high, the SEC said, per Reuters, adding PulseChain and PulseX offerings are now "practically worthless." (More cryptocurrency stories.)

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