Working Group Secures Agreement to Return Full Value of Investments

WASHINGTON, D.C. – (September 8, 2024) – The North American Securities Administrators Association (NASAA) announced today that a working group of state securities regulators has reached a muti-million-dollar settlement with GSB Gold Standard Corporation AG, a company based in Germany that purportedly operates in the fintech and banking industries, and GSB Gold Standard Bank LTD, more commonly known as “GS Partners.” The settlement also names Josip Heit, the principal and Chairman of the Board of GS Partners, and other affiliated organizations that are often collectively known as the “GSB Group.”

The settlement requires these respondents to return the full amount of all monies and/or cryptocurrencies invested or deposited with GSB Group, GS Partners and its affiliates, regardless of the product or service purchased from the respondents. GS Partners, its affiliated companies, and its representatives claim to have over 800,000 investors from more than 170 countries and to be close to completing $1 billion in transactions. Many of the products offered to investors were converted and often tied to a number of other tangible and intangible investments.

GS Partners and its affiliates have targeted investors primarily through in-person seminars at churches, hotels, convention centers, and other facilities nationwide. They also promoted their investments using online presentations through Zoom and Facebook Live, websites, and social media. They claimed their investment deals were “the best opportunity on the planet,” a “gamechanger,” and an “industry disrupter.” The promotors often used catch phrases like “building generational wealth” and “let your money work for you” to entice investors.

The settlement is the result of a working group of state securities regulators from Alabama, Arizona, Arkansas, California, Georgia, Kentucky, Mississippi, New Hampshire, Texas, Utah, Washington, and Wisconsin.

In October 2023, state and provincial securities regulators began pooling resources and leveraging their expertise to quickly investigate respondents and their alleged offerings of investments tied to digital assets and the metaverse, including the “G999 token,” a digital asset deployed on a proprietary blockchain purportedly tied to physical gold; “XLT Vouchers,” a digital asset purportedly representing ownership interests in a skyscraper; and investments in a so-called “staking pool” in a metaverse known as “Lydian World.” The investigation also focused on the alleged sale of “Elemental and Success Series Certificates,” through which purchasers were allegedly incentivized through gamification to continue adding more and more value to their certificates to unlock greater returns, such as the payment of weekly or monthly passive income.

In November 2023, state regulators and the British Columbia Securities Commission began filing enforcement actions against the respondents to stop the allegedly illegal offers and sales. Starting today, working group members will begin to announce settlements of their outstanding enforcement actions. The working group negotiated settlement terms that are intended to permit their agencies and other U.S. state and Canadian provincial securities regulators to settle on similar terms. Investors will have 90 days to file a claim.

“This case touches many of the concerns that regulators have with regard to digital assets and the need for oversight,” said Claire McHenry, NASAA President and Deputy Director of the Nebraska Department of Banking and Finance. “Securities registration ensures that investors have material and accurate information about the products and company, they also operate to keep bad actors away from our securities markets. I want to thank state and provincial securities regulators involved in this effort as well as NASAA Enforcement Section Chair Amanda Senn and Vice Chair Joe Rotunda for their hard work on this case. Through NASAA, state and provincial regulators work together to protect investors across North America.”

Customers who invested in or deposited funds with the respondents will be eligible to receive the value of their investments or deposits, less the value of any withdrawals. The settlement applies to all products and services sold by the respondents, including G999 token, the XLT Vouchers, the so-called staking pool in the metaverse and the Elemental and Success Series Certificates, so long as the investments were purchased from respondents. The claims process will be administered by AlixPartners LP.

NASAA Enforcement Committee Chair Amanda Senn, Director of the Alabama Securities Commission, and Vice-chair Joe Rotunda commended regulators from the working group jurisdictions for their work in investigating the matter that led to the settlement and return of customer funds.

“This resolution of this complex case will provide significant financial relief to investors,” said Senn and Rotunda. “The settlement is an important reminder to every firm and promoter to comply with securities laws.”

– NASAA–

About NASAA:

Organized in 1919, the North American Securities Administrators Association (NASAA) is the oldest international organization devoted to investor protection. NASAA is a voluntary association whose membership consists of the securities regulators in the 50 states, the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, the 13 provincial and territorial securities regulators in Canada, and the securities regulator in México. For more information, visit www.nasaa.org.

For More Information:

Fred Baldassaro, Director of Communications
fbaldassaro@nasaa.org | 202-737-0900

Karen Grajales, Manager, Communications and Investor Outreach
kgrajales@nasaa.org | 202-737-0900