Sonic ate it, prompting Knuckes to punch him in the stomach. In the fat stomach.
This made Sonic puke up the diamond. The green diamond.
Now this is getting old. Very old.
Anyway, he did and got his precious Master Emerald back. Except he was too busy writing this article, so Eggman stole it. And then ate it. Knuckles travelled all the way there to be SPARTA kicked into a pit in a very cliche manner. And then Knuckles ate the pit. When he crapped out the diamond, it was brown. And it had children with another Master Emerald, resulting in the Chaos Emeralds. These grew up into Super Emeralds, which Sonic ate, thus repeating an endless cycle.