Five U.S. states have settled with GS Partners, the company that offered multiple crypto investments, to give back investors 100% of their funds, the Texas State Securities Board (TSSB) announced Monday.
The TSSB wrote in its announcement that after a multi-jurisdictional investigation, Texas, Alabama, Arizona, Arkansas and Georgia have reached a settlement agreement with GS Partners' owner, Josip Heit, and his companies.
This means that GS Partners will pay back investors’ money in full, in exchange for having all civil claims and investigations dropped against the company, with no monetary penalty. GS and Heit also agreed to a cease-and-desist from offering unregistered securities in those states.
The settlement comes after U.S. state regulators filed enforcement actions against GS Partners last November, accusing the company of defrauding investors through crypto asset investments by misrepresenting expected profits and risks of loss.
GS Partners, an umbrella name for over a dozen affiliated entities owned by Heit, operated a marketing service that sold several crypto-related investments, including tokenized shares in a Dubai skyscraper and the virtual real estate metaverse project “Lydian World.”
Start your day with the most influential events and analysis
happening across the digital asset ecosystem.
The latter metaverse project sold fractional ownerships in a virtual skyscraper in the metaverse and reportedly guaranteed returns of up to 5% per week to investors. GS Partners’ failure to raise its goal of $175 million through token sales caused “significant losses” to its investors, the TSSB wrote in a previous statement in November.
“We welcome this settlement,” said Heit, in a press release. “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.”
According to Heit’s legal representative, Quinn Emanuel Urquhart & Sullivan, LLP, other states outside of the five states will be able to join the settlement on the same terms.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.