Let’s say that you have allegedly defrauded investors to the tune of millions of dollars. How would you spend your windfall?
If you’re Richard Heart, founder of crypto ventures Hex, PulseChain, and PulseX, the answer is evidently bling. Lots of bling.
On July 31st, the SEC charged Heart (a.k.a. Richard Schueler) with “conducting unregistered offerings of crypto asset securities that raised more than $1 billion in crypto assets from investors.” Heart sold Hex, the Ethereum-based token he launched in 2019, as “the highest appreciating asset that has ever existed in the history of man.”
The SEC alleges that Heart was able to “recycle” investor funds to make the presale of HEX appear much more successful than was actually the case. This, in turn, attracted more investment while giving Heart himself control of most of the tokens—and making him very, very rich. “Although Heart claimed these investments were for the vague purpose of supporting free speech, he did not disclose that he used millions of dollars of PulseChain investor funds to buy luxury goods for himself,” the SEC alleges.
If you’ve suddenly got several hundred million bucks burning a proverbial hole in your pocket, you’ve got a few options: You could launder it; you could fill a giant bank vault with gold coins and swan dive into it at your leisure; or, as Heart is said to have done, you could blow it on precious metal, gem-set Rolexes and give half of Geneva a heart attack.
An image on Instagram shows a grinning Heart stacking a white gold, gem-set Submariner reference 116659SABR (garish but, admittedly, dope) with a rose gold, gem-set “Rainbow” Daytona reference 116595RBOW (also garish but, admittedly, striking). It would also seem that he nabbed himself the infamous “Eye of the Tiger” Daytona reference 116588TBR for a cool quarter-million—which makes sense, seeing as it’s a watch that sort of looks like it was designed by some combination of Richie Rich and Jacob the Jeweler. Also displayed in one of Heart’s YouTube videos is a rose gold, gem-set GMT-Master II “Pepsi” reference 116755SARU. (It feels like Heart took Bobby Axelrod’s wisdom to heart: “What’s the point of having f*ck-you money if you never say f*ck you?”)
Beyond the simpler correlation between, well, greed and luxury items, there’s a more nuanced correlation specifically between the health of crypto markets and the health of the luxury watch market. During the heyday of digital currencies, crypto bros were buying up Rolex, Patek, and AP like average people stocked up on canned goods. (A global pandemic in which people spent funds on what would’ve been allocated for vacations on luxury goods instead certainly helped.) Following the leaner days of 2022, with soaring interest rates, a volatile stock market, and the collapse of crypto valuations, many buyers sold off their luxury watches, flooding the secondary market and softening prices on models that had become almost laughably overvalued. (See: the Patek Philippe Nautilus reference 5711.) As of mid-2023, the market seems to be stabilizing somewhat.
The economics of the secondary watch market aside, we have a suggestion: If you’re going to defraud investors out of hundreds of millions, maybe wear a Timex? At least on YouTube.