Several U.S. states, including California and Texas, have taken action against GS Partners, accusing the company of defrauding cryptocurrency investors through various fraudulent schemes. Regulators allege that GS Partners violated securities laws by making false claims and withholding important details when selling unregistered crypto assets to retail investors.
Unrealistic Promises and Misleading Practices
The enforcement action targets multiple entities affiliated with GS Partners, such as GSB Gold Standard Bank Ltd., Swiss Valorem Bank Ltd., and GSB Gold Standard Corporation AG. The company is accused of promoting and selling digital tokens linked to a Dubai skyscraper, metaverse real estate, liquidity pools, and other crypto assets while making unrealistic promises of high returns. One aspect of the business involved the promotion of digital tokens for the metaverse world Lydian World, while another offered investments in a 36-story Dubai skyscraper known as the “G999 Tower.”
GS Partners claimed that these opportunities would generate “lucrative profits” and “generational wealth” using blockchain technology and digital assets supposedly backed by gold. In addition, the company operated a multi-level marketing platform offering “MetaCertificates.” Regulatory agencies argue that interconnected entities controlled by Josip Dortmund Heit have orchestrated crypto investment fraud, posing immediate harm to the public.
These fraudulent offerings have no real underlying value, deceiving investors and posing a significant risk.
Notably, GS Partners enlisted celebrity endorsements from high-profile athletes like boxer Floyd Mayweather Jr. and soccer player Roberto Carlos to attract attention to their bogus investments.
State Collaboration to Protect Retail Investors
Emergency actions to cease operations were initiated by California and Texas, but other states, including Alabama, Kentucky, New Jersey, and Wisconsin, have also leveled similar accusations against GS Partners. Regulators across these states are determined to shut down these fraudulent schemes to prevent further harm to retail investors.
The crackdown on GS Partners underscores the persistent need to safeguard consumers from potentially predatory practices in the digital asset marketplace. It serves as a reminder of the importance of regulatory oversight and protecting investors from deceitful tactics.
