The GS Partners, a popular crypto marketing platform, has announced that it would return 100% of investors’ money to avoid further court cases and lawsuits following discussions with five US States.
The platform marketing firm, accused of fraud, fell short of its fundraising target for a Dubai skyscraper project, leaving investors with heavy losses.
GS Partners faces legal setbacks over its Dubai skyscraper project
Starting in mid-November 2023, regulators from 10 U.S. states and one Canadian province went on against GS Partners and its CEO, Josip Heit, alleging fraud and ordering an immediate halt to the company’s securities sales.
This development followed the company’s pursuit of several investments, most notably the Dubai skyscraper project. The venture included virtual land plots and a staking pool within the “Lydian World” metaverse, tied to a gold-backed crypto token representing tokenized shares of the skyscraper. GS Partners had even promised investors up to 5% in weekly returns.
However, these promised returns quickly collapsed when the company failed to raise the required $175 million. Investors who had committed funds to the project experienced substantial losses and later filed complaints, accusing GS Partners of misrepresenting crucial details about the skyscraper investment.
Despite its troubling legal setbacks, the company signed a settlement agreement with five U.S. states—Texas, Alabama, Arizona, Arkansas, and Georgia—on Monday. The company agreed to return all investment funds to settle their civil claims.
We are committed to refunding all eligible customers through the claims process. Our customers always come first. Protecting the brand, our reputation, and our customers is our top priority.
Josip Heit
The Texas Securities Board believes that the refund serves the best interest of the investors
The Texas State Securities Board led the investigation and subsequent settlement. Joe Rotunda, enforcement director at the Texas State Securities Board, highlighted the rarity of an institution offering full financial relief to investors instead of partial restitution. He emphasized that state regulators have long hoped for such opportunities and should act when they arise. Rotunda underscored that the main objective was to recover investor funds, expressing concern about the potential diversion of assets toward state penalties.
Therefore, he was pleased to waive fraud allegations in exchange for returning 100% of client deposits. He anticipated that the claims process, overseen by AlixPartners LP, would start in October and continue for 90 days, with Heit and his companies covering AlixPartners’ fees as part of the settlement. Rotunda added that even with a push to expedite the case, it likely wouldn’t reach the court evidence stage before clients received their asset returns.
