Diadems (or crowns) are worn on one’s head (see Revelation 12:3) to signify one’s authority. This beast, though, wears its crowns on its horns to signify that its authority has come from and is supported through its forceful power, its muscle. Its legitimacy is based on nothing it received but strictly on what it took. This explains also why it has “ten” diadems (in contrast to the seven the dragon had).
1 And I saw a beast rising out of the sea, with ten horns and seven heads, with ten diadems on its horns and blasphemous names on its heads.