US Regulators Secure Full Refunds for Investors Amid $1B Fraud Settlement With GSB Group

Five U.S. states have secured a settlement with Gold Standard Corporation AG (GSB Group), operators of an alleged $1 billion illegal cryptocurrency investment scheme to compensate for the financial losses suffered by numerous investors who participated in the project.

The settlement comes after regulators filed enforcement actions against GSB Partners last November, accusing the company of defrauding investors through crypto asset investments by misrepresenting expected profits and risks of loss.

The company allegedly sold products such as token-based ownership in a skyscraper, investments in the metaverse, and a cryptocurrency that they claimed could be staked for rewards convertible into gold.

Regulators Seek Full Reimbursement for Crypto Investors

The settlement was reached following a coalition of securities regulators led by the Texas State Securities Board (TSSB), along with authorities from Alabama, Arizona, Arkansas, and Georgia. 

According to TSSB, GSB Group will fully compensate investors who lost money in an investment scheme in exchange for having all civil claims and investigations dropped against the company, with no monetary penalty. Moreover, the settlement encompasses clients who invested in any of GSB’s offerings, from cryptocurrency tokens to educational programs. 

Joe Rotunda, the enforcement director at the TSSB, emphasized the scope of the impact, noting that hundreds of thousands of investors in the United States and Canada bore the brunt of this ordeal. He stated:

“We have negotiated a settlement that will ensure that all clients in any state or province that join the settlement receive 100% of their deposits, less any withdrawals. Our goal is to identify all of the clients and make sure they know about this process, they have the opportunity to get their funds back.”

The regulators reached a settlement agreement with the chairman of GSB Group, Josip Heit, and his companies after a multi-jurisdictional investigation.

GSB Group Response to the Settlement 

GSB Group and Heit agreed to a cease-and-desist from offering unregistered securities in those states. In a press release, he said:

“We welcome this settlement. We are committed to refunding all eligible customers through the claims process. Our customers always come first. Protecting the brand, our reputation, and our customers is our top priority.”