Richard Heart, a US-born crypto influencer residing in Finland, is at the center of a legal battle with the SEC.
The regulatory body alleges that Heart utilized "at least" $12 million from his crypto products to purchase luxurious items, including sports cars, luxury watches, and a colossal 555-carat black diamond named The Enigma.
Heart gained prominence through his YouTube channel, which he established in 2017 to promote his crypto products, such as the Hex token and its sister product, PulseChain, built on the PulseX protocol.
The SEC's lawsuit accuses Heart of raising over $1 billion through his unregistered crypto securities, Hex, PulseChain, and PulseX.
He allegedly marketed these products as a gateway to immense wealth for investors, claiming that Hex would become the most appreciating asset in human history.
Although Heart defended the investments as supporting "free speech," the SEC contends that he never disclosed using "millions of dollars of PulseChain investor funds to buy luxury goods for himself."
The lavish purchases included a $534,916 McLaren sports car, a $314,125 Ferrari Roma, and a $1.38 million Rolex watch. In February 2022, he purportedly spent $5 million of investors' assets to acquire The Enigma.
Moreover, the lawsuit reveals that between December 2019 and November 2020, Heart accepted over 2.3 million Ethereum tokens, valued at approximately $678 million, in exchange for Hex tokens.
The SEC claims that the majority of these transactions involved "recycling," allowing Heart and other insiders to manipulate "a large number of Hex tokens" while falsely inflating trading volume and demand.
Eric Werner, the director of the SEC's Fort Worth regional office, asserts that Heart encouraged investors to buy unregistered crypto asset securities and subsequently deceived them by splurging their assets on extravagant luxury items.