The organizer of a $1 billion ICO spent investors' money on a diamond

$1 billion ICO organizer Richard Hart spent investors' money on a diamond

SEC seeks an injunction against Hex and PulseChain CEO Richard Hart and the return of illegally gained funds

The U.S. Securities and Exchange Commission (SEC) accused Richard Hart (aka Richard Schuler) and three companies under his control (Hex, PulseChain, and PulseX) of selling more than $1 billion worth of unregistered securities under the guise of crypto-assets and buying luxury goods with investors' funds.

The commission accused Hart of misappropriating $12 million that was used to buy luxury goods such as sports cars, watches, and The Enigma, the world's largest black diamond weighing 555 carats.

In 2006, the diamond was entered into the Guinness Book of World Records as one of the largest cut diamonds. The diamond had been in a private collection for more than 20 years before being sold to Hart through Sothbey's Auction.

The SEC's lawsuit, filed in the U.S. District Court for the Eastern District of New York, alleges that Hart, Hex, PulseChain, and PulseX violated the antifraud provisions of Section 5 of the U.S. Securities Act. The SEC plans to seek an injunction against the said companies, return of illegally gained funds, and monetary damages.

In July, the SEC filed a lawsuit against cryptocurrency company Celsius, its former head Alex Mashinsky was arrested on charges of fraud and market manipulation.