Texas State Securities Board accuses network of fraudulent activities
The Texas State Securities Board has accused a network of companies operating from Germany of engaging in fraudulent activities related to digital assets and investments in a staking pool in a proprietary metaverse. The network of companies, controlled by Josip Dortmund Heit, has come under fire for its failed real estate token raise.
Details of the alleged fraudulent activities
The companies involved, GS Partners, GS Smart Finance, and GS Wealth, held three rounds of metaverse property sales starting in September 2021. Investors were offered the opportunity to purchase XLT Vouchers or BNB Chain tokens, which represented ownership of one square inch of a unit in the company's G999 Tower metaverse, at a price of 9.63 Tether (USDT) per voucher. However, the value of the token plummeted to less than 0.0000049 USDT on PancakeSwap, a decentralized exchange, after the companies failed to reach their $175 million fundraising target.
Unregistered security offerings
According to regulators, the investment products created by the network of companies, including Lydian World metaverse tokens, gold tokens, G999 coin, and Elemental Certificates, were unregistered security offerings. The Texas State Securities Board has taken emergency enforcement action, ordering the companies to cease and desist from such activities in the state.
Warnings from other securities regulators
It's worth noting that the Ontario Securities Commission issued a warning on August 15, stating that GS Partners was not registered to do business in Ontario, Canada. Securities regulators in other Canadian provinces, including Saskatchewan, British Columbia, Alberta, and Quebec, have also published warnings regarding the activities of the network of companies.
Conclusion
The failed real estate token raise by the network of companies under the GS brand has attracted the attention of Texas regulators. The companies are accused of engaging in fraudulent activities and offering unregistered security products. This case serves as a reminder for investors to exercise caution and conduct thorough due diligence before participating in any investment opportunity.
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