Crypto mogul Richard Heart’s Instagram biography is a case study in peacocking: “I own the world's largest diamond, quickest #Ferrari and most expensive #Rolex's ever made.”
But now, in what has become a routine storyline for crypto’s high-flying tycoons, Heart is accused of funding his lifestyle with millions of dollars in misappropriated funds. On Monday, the Securities and Exchange Commission charged him and three of his entities with “conducting unregistered offerings” of crypto securities, which collectively raised “more than $1 billion.”
Heart and one of the entities were also charged with fraud for “misappropriating at least $12 million” and using that money to splash out on “sports cars, watches,” and his massive “555-carat black diamond known as ‘The Enigma’”—which was the world’s biggest of its type when it sold for $4.3 million last year.
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“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,” Eric Werner, director of the SEC’s Fort Worth regional office, said in a statement.
Heart could not immediately be reached for comment.
The SEC has recently sought to crack down on crypto operators, including by targeting some of the industry’s largest platforms, such as Coinbase and Gemini. It has also gone after individual players like Heart.
According to Monday’s complaint, in 2018 Heart started promoting one of his entities, Hex, and boosting its tokens “as an investment designed to make people ‘rich.’” Those tokens were not registered. Later, he allegedly advertised a separate “feature for Hex tokens” that supposedly would give investors “returns as high as 38 percent” and orchestrated a maneuver that let him “surreptitiously gain control of more Hex tokens.”
Rather than slink away with his allegedly ill-gotten funds, Heart has aggressively sought to establish himself as an influencer. His catalog ranges from hype videos for crypto to a 30-minute recording of him installing a bidet for his mother.
In one characteristic Instagram post emblazoned with the banner “How to make mad gains,” he appended a caption that read, “Guys I’m the best person in crypto.” In another, he posed in gray camouflage clothing atop a bright yellow Mercedes. The license plate self-consciously declared, “BIG PP.”
