555-ct Black Diamond: Case Dismissed Against Crypto Boss
March 10, 25
(IDEX Online) - A federal judge has dismissed the case against crypto boss Richard Heart alleging he illegally used investor funds to buy The Enigma, the world's largest black natural color diamond - a 555.55-ct carbonado - for $4.3m.
US District Court Judge Carol Amon said on Friday (7 March) that the US Securities and Exchange Commission (SEC) had not shown that Heart's alleged misconduct had taken place in the US, and was therefore beyond its jurisdiction. Heart, a US citizen, lives in Finland.
In 2023 the SEC charged Heart (aka Richard Schueler), aged 44, and his crypto companies Hex, PulseChain, and PulseX, with conducting unregistered offerings of asset securities that raised over $1bn.
It also charged Heart and PulseChain with fraud for allegedly misappropriating at least $12m to buy McLaren and Ferrari sports cars, four Rolex watches (together worth more than $3m) and The Enigma.
In a written filing the judge said the SEC could amend its complaint to "remedy the deficiencies identified."
The Enigma diamond was sold by Sotheby's in a single lot online auction without reserve in February 2023.
The auction house didn't name the buyer, but Heart tweeted his 180,000 followers that he'd bought it with cryptocurrency and would re-name it the Hex.com diamond, after the blockchain platform he founded.
The Enigma is a carbonado diamond - that's the term used to describe super-hard black diamonds that are found exclusively in Central African Republic and Brazil.
But the origins of this particular gem are shrouded in mystery. Sotheby's said it is thought to have been created "either from a meteoric impact or having actually emerged from a diamond-bearing asteroid that collided with Earth."
Pic shows The Enigma and Richard Heart