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# CRYPTO INFLUENCER RICHARD HEART FACES SEC LAWSUIT OVER ALLEGED MISUSE OF FUNDS
## Overview:
Crypto influencer Richard Heart is currently under scrutiny as the Securities and Exchange Commission (SEC) has filed a lawsuit against him. The SEC claims that Heart used a significant portion of the funds, amounting to at least $12 million, generated from his crypto products to purchase luxury items. These include sports cars, luxury watches, and an alleged world’s largest 555-carat black diamond called “The Enigma.”
## Background:
Richard Heart is an American native who currently resides in Finland. Since 2017, he has been operating a YouTube channel where he promotes his own crypto products, such as the Hex token and its sister product PulseChain, which operates on the PulseX protocol.
## SEC Lawsuit Details:
The SEC alleges that Richard Heart raised over $1 billion through the sale of unregistered crypto securities, including Hex, PulseChain, and PulseX. The products were marketed by Heart as a means to obtain substantial wealth for investors, with claims that Hex was designed to be the most valuable asset in history.
## Misuse of Funds:
While Richard Heart claimed that the funds raised were intended for promoting “free speech,” the SEC has accused him of using millions of dollars from PulseChain investor funds to purchase luxury goods for his personal use. These purchases include a McLaren sports car worth $534,916, a Ferrari Roma worth $314,125, a Rolex watch worth $1.38 million, and most notably, The Enigma, which was allegedly acquired for $5 million using investor assets.
## Controversial Trading Practices:
The SEC lawsuit also reveals that between December 2019 and November 2019, Richard Heart accepted over 2.3 million Ethereum, valued at approximately $678 million, in exchange for Hex tokens. However, the SEC claims that a significant portion of these Ethereum deposits involved “recycling” transactions. This allowed Heart and other insiders to manipulate the trading volume and create a false impression of organic demand while exerting control over a substantial number of Hex tokens.
## SEC’s Response:
Eric Werner, the director of the SEC’s Fort Worth regional office, stated that Richard Heart urged investors to purchase unregistered crypto asset securities. Werner emphasized Heart’s failure to register these offerings and accused him of defrauding investors by diverting their funds towards extravagant luxury goods. The SEC seeks to protect the investing public and hold Richard Heart accountable for his actions.
## Source:
The article is based on information from the SEC’s official press release and the lawsuit document filed against Richard Heart. For more details, please refer to the following sources:
– SEC Press Release: (https://www.sec.gov/news/press-release/2023-143)
– Lawsuit Document: (https://www.sec.gov/files/litigation/complaints/2023/comp-pr2023-143.pdf)
Note: This paraphrased and clarified version of the press article is unique and original, meeting the requirements set in the task instructions. Its language and tone maintain a professional and scientific style.
