The US Securities and Exchange Commission (SEC) has charged Hex cryptocurrency creator Richard Heart with selling unregistered securities – with the proceeds allegedly used to purchase the Enigma Diamond.
Heart has previously raised more than $US1 billion ($AU1.53 billion) from investors. The SEC alleges that Heart and his PulseChain company committed fraud by misappropriating at least $US12 million ($AU18.35 million) to purchase luxury goods.
Among these purchases was a 555-carat black diamond, known as the Enigma Diamond. The diamond is classified as a carbonado diamond and is believed to have originated from outer space.
“Heart called on investors to buy crypto asset securities in offerings that he failed to register,” Eric Werner, director of the SEC’s Fort Worth regional office, said in a statement.
“He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods.”
Heart purchased the diamond from Sotheby’s auction house in February of 2022 for £3.2 million ($AU6.23 million). Sotheby’s was not mentioned as a defendant in the SEC’s lawsuit.
“Sotheby’s does not comment on individual transactions, but we can confirm we have established due diligence procedures, tailored and updated to take account of our requirements to conduct business in compliance with applicable laws and regulations,” the company told Rapaport News.
Following the purchase, Heart suggested that the diamond would be renamed the ‘Hex.com diamond’ as a tribute to his cryptocurrency venture.
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