Regulators crack down on GS Partners for allegedly fraudulent metaverse crypto offerings. Image by Aliaksandra, Adobe Stock.
California, Texas, and several other U.S. states have cracked down on GS Partners, accusing the company of defrauding cryptocurrency investors through various fraudulent schemes. Regulators say GS Partners violated securities laws by making false claims and omitting key details when selling unregistered crypto assets to retail investors.
Celebs and Skyscrapers in Alleged Crypto Fraud
The enforcement action focuses on several GS Partners entities including GSB Gold Standard Bank Ltd., Swiss Valorem Bank Ltd., and GSB Gold Standard Corporation AG.
GS Partners is alleged to have promoted and sold digital tokens linked to a Dubai skyscraper, metaverse real estate, liquidity pools, and other crypto assets while making unrealistic promises of high returns. Regulators said one part of the business promoted digital tokens for the metaverse world Lydian World, while another sold investments in a 36-story Dubai skyscraper dubbed “G999 Tower.” The company claimed these were unique opportunities to earn “lucrative profits” and “generational wealth” through blockchain technology and digital assets supposedly backed by gold.
Additionally, GS Partners ran a multi-level marketing platform offering “MetaCertificates,” authorities stated. The agencies allege these interlinked entities are controlled by Josip Dortmund Heit and have broadly carried out crypto investment fraud, posing immediate public harm.
Metaverse Schemes Flagged as Bogus Offerings
However, state agencies say these offerings were completely fraudulent with no real underlying value. Additionally, GS Partners is accused of using celebrity endorsements from high-profile athletes such as boxer Floyd Mayweather Jr. and soccer player Roberto Carlos to draw attention to the bogus investments.
The emergency actions ordering GS Partners to cease operations were led by California and Texas. But authorities in Alabama, Kentucky, New Jersey, Wisconsin, and other states have all raised similar allegations of deceitful practices and misleading claims made to investors about the nature and profitability of the crypto assets sold by GS Partners.
Regulators say they want to shut down these allegedly fraudulent schemes before more retail investors are harmed. Crypto industry watchers note this latest crackdown highlights the continued need to protect consumers from potentially predatory behaviors in the digital asset marketplace.
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