On July 31, the Securities and Exchange Commission (SEC) charged cryptocurrency entrepreneur Richard Heart with misappropriating millions in investor funds to purchase luxury goods—including a 555 ct. black diamond auctioned last year by Sotheby’s called “The Enigma” (pictured).
Also charged were three entities controlled by Heart: Hex, PulseChain, and PulseX.
The 555.55 ct. fancy black diamond is considered the largest cut diamond ever brought to auction. Heart bought it from Sotheby’s London for $4.3 million during an online sale in February 2022, paying with cryptocurrency. Post-sale, Heart declared on Twitter the gem would now be known as the “HEX.com diamond.”
“Congratulations to the HEXican community,” he said in a video posted on Twitter. “We are now…owners of the world’s largest cut diamond.”
According to the SEC complaint, filed in New York federal court, Heart raised more than $1 billion through what the agency called the “the unregistered offer and sale of crypto asset securities” in the United States and abroad. It charged that Heart told buyers that Hex tokens were an investment which would make them “rich.”
However, the agency alleges, Heart used at least $12.1 million in funds invested in trading platform PulseChain to buy luxury goods for himself—including the Enigma, a $534,916 McLaren sports car, a $314,125 Ferrari Roma, and a $1.38 million Rolex.
The Enigma was sold by Sotheby’s without a reserve in a one-lot online auction. The diamond has been ranked as the world’s largest fancy black natural diamond by GIA and Gübelin Gem Lab. Its shape and design were inspired by the hamsa, a Middle Eastern hand-shape symbol that is a sign of protection, power, and strength.
Heart, who the SEC suit says currently resides in Helsinki, Finland, and was born Richard Schueler, could not be reached for comment, and he does not appear to have made a public statement on the allegations.
(Photo courtesy of Sotheby’s)
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