Five states have settled their actions against organizations collectively known as GSB Group and their chairman of the board Josip Heit.
This move followed an investigation launched in October 2023 and led by the Texas State Securities Board and agencies from Alabama, Arizona, Arkansas and Georgia, the Texas State Securities Board said in a Monday (Sept. 9) press release.
The investigation centered on Heit, GSB Gold Standard Corp., GSB Gold Standard Bank (dba GS Partners), and other affiliated organizations collectively known as GSB Group, according to the release.
The organizations allegedly offered investments tied to digital assets and metaverses, per the release.
“The securities markets continue to rapidly evolve, and many legitimate firms are using new technologies to develop cutting-edge products and services, increase efficiencies and contribute to overall economic development,” Texas Securities Commissioner Travis J. Iles said in the release. “Sellers of allegedly illegal securities, however, are often using the same technologies to deceive and defraud retail clients.”
Heit’s lawyers said in a Monday press release that, under the terms of the settlement, Heit and the GSB entities “will consent — without admitting or denying any violations of law or that any product offered by the GSB entities is a security — to cease-and-desist from offering or selling unregistered securities in the settling states.”
As part of the settlement, the settling states will withdraw all prior allegations of fraud or dishonest practices, no monetary penalties will be imposed, and Heit and the GSB companies will refund all eligible U.S. customers in the settling states, Quinn Emanuel Urquhart & Sullivan said in the release.
“Since the start of this matter, our goal has been to reach a settlement that serves our customers,” Heit said in the release. “As Chairman, I am proud of this outcome. We cooperated fully with the U.S. state investigations, and we are working with our attorneys to ensure that any future U.S. business complies will all applicable legal requirements.”
Hundreds of thousands of investors in the United States and Canada were harmed by their investments in the GSB Group companies, which sold products like token-based ownership in a skyscraper, investments in the metaverse and a cryptocurrency, Bloomberg reported Monday.
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