Multiple US States Order GS Partners to Halt Operations Over Crypto Fraud Allegations

According to CoinDesk, multiple U.S. states have ordered GS Partners to halt operations, accusing the company of defrauding investors in various crypto schemes, including tokenized pieces of a Dubai skyscraper and stakes of metaverse property. The operation, known as GS Partners, is an organization that comprises GSB Gold Standard Bank Ltd., Swiss Valorem Bank Ltd., and GSB Gold Standard Corporation AG, all allegedly controlled by Josip Dortmund Heit. The businesses hired sports celebrities such as former boxer Floyd Mayweather Jr. and footballer Roberto Carlos to draw attention to an array of investments, regulators said. The affiliated businesses are accused of violating state laws when they "offered and sold unqualified securities and made material misrepresentations and omissions to investors related to crypto asset investments," according to the case filed by the California Department of Financial Protection and Innovation. Texas, Alabama, and other jurisdictions are pursuing similar actions. The business has been "broadly perpetrating various fraudulent investment schemes that are threatening immediate and irreparable public harm," according to an action from the Texas State Securities Board. These investment schemes are often marketed as unique opportunities to earn lucrative profits and secure generational wealth through blockchain technology, a metaverse, liquidity and staking pools, a tokenized skyscraper, and digital assets purportedly convertible to physical gold. One part of the business offered digital assets tied to the metaverse's Lydian World, and another investments in a 36-story "G999 Tower" in Dubai. The business also operated a multi-level marketing platform that offered “MetaCertificates.” Heit and other GS Partners executives, including Bruce Innes Wylde Hughes and Dirc Zahlmann, are directly named in the actions. Neither Heit nor the company immediately responded to attempts to reach them through business sites and social media.