- The Texas State Securities Board has accused companies under the GS umbrella of fraudulent practices.
- Multi-jurisdictional warnings against GS Partners.
The Texas State Securities Board has raised accusations against a network of companies operating under the “GS” brand, based in Germany, for engaging in fraudulent activities related to digital assets and investments in a proprietary metaverse. The entities involved, namely GS Partners, GS Smart Finance, and GS Wealth, are allegedly controlled by Josip Dortmund Heit.
Texas regulator accuses GS Partners of defrauding investors
According to regulatory statements on November 16, the respondents conducted three rounds of metaverse property sales starting from September 2021. During this period, investors were presented with the opportunity to purchase XLT Vouchers or BNB Chain tokens, representing ownership of one square inch of a unit in the company’s G999 Tower metaverse. The offering price was set at 9.63 Tether (USDT) per voucher. However, the value of the token experienced a rapid decline, plummeting to less than 0.0000049 USDT each on the decentralized exchange PancakeSwap.
This decline occurred after the respondents fell short of their fundraising target of $175 million for the offering. Notably, the entities in question had not been registered with the Securities Commissioner as dealers or agents during the relevant period. Regulators further allege that various investment products introduced by the GSB group, including Lydian World metaverse tokens, gold tokens, G999 coin, and Elemental Certificates, constituted unregistered security offerings.
Multi-jurisdictional warnings against GS Partners
In response to these allegations, the Texas State Securities Board has initiated an emergency enforcement action, seeking a cease and desist order against the GSB companies to prevent such activities within the state. This is not the first instance of regulatory scrutiny against the GS Partners network. On August 15, the Ontario Securities Commission issued a warning, stating that GS Partners was not authorized to conduct business in the province of Ontario. Prior warnings had also been issued by securities regulators in Canadian provinces such as Saskatchewan, British Columbia, Alberta, and Quebec.
The regulatory body emphasized its role in issuing warnings and alerts to inform the public about potential harmful or illegal activities. They maintain a warning list containing companies or individuals engaging in activities that pose risks to investors. The Ontario Securities Commission provides a comprehensive list of investor warnings and alerts on its official website. Investors have the option to sign up for email notifications to stay informed about new warnings and alerts, and the agency encourages them to follow updates on Twitter.
The accusations against the GS network highlight the continued vigilance of regulatory authorities in scrutinizing digital asset offerings, especially in the evolving landscape of metaverse investments. The enforcement actions demonstrate the commitment to protecting investors from potential fraudulent schemes, reinforcing the importance of regulatory oversight in the crypto and blockchain space. As the industry matures, such regulatory interventions play a crucial role in maintaining investor confidence and fostering a secure environment for digital asset transactions.
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