Crypto influencer Richard Heart has been sued by SEC for using his investor’s proceeds to acquire luxury goods in the form of sports cars, rare gold, watches, and expensive designer clothing.
The influencer on his YouTube channel promotes two of his cryptocurrencies, the Hex token and its sister product, PulseChain, which he sells on the PulseX protocol platform. According to authorities, Heart presents his crypto investment product as the best interest-rate investment with insane profit margins. He managed to raise over $1 billion from the illegal crypto deal and used the proceeds to fund his extravagant lifestyle, spending $534,916 on a McLaren sports car, $314,125 on a Ferrari, $1.38 million on a Rolex watch, $5 million on a rare diamond called Enigma and many more insane purchases.
While promising his investors a safe haven, he does not tell them that he uses their direct investment proceeds to fund his ridiculous lifestyle, his business is not also registered hence SEC is charging him with fraud.
Crypto influencer Richard Heart is facing a lawsuit from the Securities and Exchange Commission over claims he used “at least” $12 million in proceeds from his crypto products to buy luxury products. That includes the purchase of sports cars, luxury watches, and a 555-carat black diamond called The Enigma — supposedly the largest in the world.
Heart was born in the US and currently lives in Finland. He has operated a YouTube channel since 2017, where he promotes his own crypto products, including the Hex token and its sister product PulseChain, which operates on the PulseX protocol.
In its lawsuit, the SEC alleges Heart raised over $1 billion through his unregistered Hex, PulseChain, and PulseX crypto securities. According to the SEC, Heart marketed his products as “a pathway to grandiose wealth for investors” and espoused claims that Hex “was built to be the highest appreciating asset that has ever existed in the history of man.”
While Heart said the investments in his products were for promoting “free speech,” the SEC claims he never revealed that he actually spent “millions of dollars of PulseChain investor funds to buy luxury goods for himself.” Some of those purchases include a $534,916 McLaren sports car, a $314,125 Ferrari Roma, and a $1.38 million Rolex watch. In February 2022, he allegedly spent $5 million of investors’ assets to purchase The Enigma.
The SEC alleges Richard Heart used at least $12 million in investor funds to purchase luxury goods. Lol. pic.twitter.com/IfMOBmTM3l
— Tiffany Fong (@TiffanyFong) July 31, 2023
Additionally, the lawsuit states that from December 2019 to November 2019, Heart accepted over 2.3 million Ethereum valued at around $678 million in exchange for Hex tokens. However, the SEC claims 94 to 97 percent of these ETH deposits were “recycling” transactions that allowed Heart and other insiders to control “a large number of Hex tokens” while also “creating the false impression of significant trading volume and organic demand.”
“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,” said Eric Werner, the director of the SEC’s Fort Worth regional office. “This action seeks to protect the investing public and hold Heart accountable for his actions.”
This follows a wave of lawsuits from the SEC that have unfolded over the past several months. In addition to a lawsuit against Binance and its CEO Changpeng Zhao, the SEC is also taking action against Coinbase and Tron founder Justin Sun. Out of all these lawsuits, though, this one stands out for the sheer amount of luxury items that Heart (allegedly) spent investors’ funds on.
While his case is still in court, Heart seems unbothered by the development and was spotted in a Louis Vuitton shop again with about six shopping bags, which he could barely carry. Heart has to hold one bag with his mouth while he struggled to hold the other 5 in his hands, all from the money he acquired from his illegal crypto business.
