GS Partners to refund investors in five US states, fraud claims dropped

Quick Take

  • Investors in five U.S. states are expected to get back 100% of their money invested through GS Partners.
  • GS Partners offered several crypto investments such as virtual real estates in a metaverse.

Five U.S. states have settled with GS Partners, the company that offered multiple crypto investments, to give back investors 100% of their funds, the Texas State Securities Board (TSSB) announced Monday.

The TSSB wrote in its announcement that after a multi-jurisdictional investigation, Texas, Alabama, Arizona, Arkansas and Georgia have reached a settlement agreement with GS Partners' owner, Josip Heit, and his companies. 

This means that GS Partners will pay back investors’ money in full, in exchange for having all civil claims and investigations dropped against the company, with no monetary penalty. GS and Heit also agreed to a cease-and-desist from offering unregistered securities in those states.

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

GS Partners, an umbrella name for over a dozen affiliated entities owned by Heit, operated a marketing service that sold several crypto-related investments, including tokenized shares in a Dubai skyscraper and the virtual real estate metaverse project “Lydian World.” 

The latter metaverse project sold fractional ownerships in a virtual skyscraper in the metaverse and reportedly guaranteed returns of up to 5% per week to investors. GS Partners’ failure to raise its goal of $175 million through token sales caused “significant losses” to its investors, the TSSB wrote in a previous statement in November

“We welcome this settlement,” said Heit, in a press release. “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.”

According to Heit’s legal representative, Quinn Emanuel Urquhart & Sullivan, LLP, other states outside of the five states will be able to join the settlement on the same terms.


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About Author

Danny Park is an East Asia reporter at The Block writing on topics including Web3 developments and crypto regulations in the region. He was formerly a reporter at Forkast.News, where he actively covered the downfall of Terra-Luna and FTX. Based in Seoul, Danny has previously produced written and video content for media companies in Korea, Hong Kong and China. He holds a Bachelor of Journalism and Business Marketing from the University of Hong Kong.

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