The Texas State Securities Board has taken action against a network of companies operating under the “GS” brand based in Germany, accusing them of engaging in fraudulent activities related to digital assets and investments in a staking pool within their proprietary metaverse.
The network is reportedly controlled by Josip Dortmund Heit.
According to regulatory authorities, on November 16th, GS Partners, GS Smart Finance, and GS Wealth, under the leadership of Josip Dortmund Heit, conducted three rounds of metaverse property sales starting in September 2021.
During this period, investors were offered the opportunity to purchase XLT Vouchers or BNB Chain tokens, which represented ownership of one square inch of a unit within the company’s G999 Tower metaverse.
These tokens were initially priced at 9.63 USDT per voucher. However, their value plummeted rapidly to less than 0.0000049 USDT each on the decentralized exchange PancakeSwap after the respondents failed to meet their $175 million fundraising target.
The Texas State Securities Board also noted that the respondents had never been registered with the Securities Commissioner as dealers or agents, which is a legal requirement for conducting such financial activities.
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Furthermore, regulators allege that various other investment products offered by the GSB network, including Lydian World metaverse tokens, gold tokens, G999 coin, and Elemental Certificates, also constituted unregistered security offerings.
In response to these allegations, the Texas State Securities Board has filed an emergency enforcement action, demanding that the GSB group of companies immediately cease and desist from engaging in these activities within the state of Texas.
This is not the first time the GSB network has faced regulatory scrutiny.
On August 15th, the Ontario Securities Commission issued a warning, stating that GS Partners was not authorized to conduct business in the Canadian province of Ontario.
Prior to this, securities regulators in other Canadian provinces, including Saskatchewan, British Columbia, Alberta, and Quebec, had also issued warnings about the activities of GS Partners.
In conclusion, the Texas State Securities Board’s actions against the GS network of companies highlight the growing concerns surrounding unregistered security offerings and fraudulent activities in the digital asset and metaverse space.
It serves as a reminder of the importance of regulatory oversight in protecting investors and maintaining the integrity of financial markets.
