The Texas State Securities Board Accuses GS Brand Companies of Fraudulent Activities
The Texas State Securities Board has accused a network of companies operating from Germany under the “GS” brand of fraudulent activities related to digital assets and investments in a proprietary metaverse. The companies, controlled by Josip Dortmund Heit, are named GS Partners, GS Smart Finance, and GS Wealth.
According to regulators, these companies held three rounds of metaverse property sales starting in September 2021, offering XLT Vouchers and BNB Chain tokens representing ownership of units in the G999 Tower metaverse. However, the value of these tokens plummeted after failing to reach their fundraising target.
“Respondents have not been registered with the Securities Commissioner as dealers or agents at any time material hereto.”
Regulators also allege that other investment products created by GSB, such as Lydian World metaverse tokens, gold tokens, G999 coin, and Elemental Certificates, constituted unregistered security offerings. The Texas State Securities Board has filed an emergency enforcement action for the GSB group of companies to cease and desist from such activities in the state.
Warnings Issued by Canadian Securities Regulators
The Ontario Securities Commission previously issued a warning that GS Partners was not registered to do business in Ontario. Similar warnings were also published by securities regulators in other Canadian provinces including Saskatchewan, British Columbia, Alberta, and Quebec.
Related: Texas lawmaker introduces resolution to protect Bitcoin miners and HODLers
Hot Take: GS Brand Companies Face Allegations of Unregistered Security Offerings
The Texas State Securities Board has taken swift action against the network of companies operating under the “GS” brand from Germany for alleged fraudulent activities tied to digital assets and metaverse investments. This enforcement action reflects a growing concern among regulators about unregistered security offerings within the crypto space. Investors should exercise caution when engaging with such companies and conduct thorough research before investing in any digital asset or metaverse project.
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