Richard Heart, the founder of the controversial cryptocurrency project Hex, has been charged by the SEC for conducting unregistered crypto asset security offerings, misappropriating funds, and fraudulently selling the security.
The SEC alleges that Heart raised over $1 billion from investors and evaded securities laws by asking them to "sacrifice" crypto assets instead of investing. It is claimed that Heart spent some of the investors' funds on luxury items, including sports cars and a large diamond.
The SEC is seeking various forms of relief, including disgorgement of ill-gotten gains and penalties. The outcome remains uncertain, but historically, unregistered token offerings have settled for smaller amounts. The SEC charges are civil, and it's unclear if the Department of Justice will pursue criminal charges.