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Five states in the U.S. have reached a settlement with GSB Group, owned by Josip Heit, over an alleged $1 billion illegal cryptocurrency investment scheme.
The scheme involved tokenized partial ownership of a skyscraper and other crypto products like the G999 token and XLT vouchers.
Settlement Details and Investigation Efforts
Under the settlement terms stated in a September 9 official release, Heit and GSB agreed to stop offering unregistered securities in Texas, Alabama, Arizona, Arkansas, and Georgia without admitting any law violations.
The company’s attorneys of record, Avi Perry and Alex Spiro, said the involved states would withdraw all prior fraud allegations.
Joe Rotunda, Director of Enforcement at the Texas State Securities Board, discussed the case in an interview with Bloomberg. He explained that the settlement is a win for all, as it ensures participating states and provinces receive a full refund of their deposits.
This settlement follows a scheme involving hundreds of thousands of investors that collapsed after failing to raise $175 million through cryptocurrency sales linked to the skyscraper project.
GSB Group Rugged Hard: $1B Crypto Wreck Gets Refunds
Five states just went full degen hunter mode, dragging GSB Group into a $1B settlement to pay back investors who got rugged on tokenized skyscrapers and metaverse fantasies.
Texas, Georgia, and the crew are getting that bag… pic.twitter.com/GycfVbOplF
— Mario Nawfal’s Roundtable (@RoundtableSpace) September 10, 2024
Investigations began in October 2023, with enforcement actions deployed in November 2023 by authorities from the settling states.
According to the official release from the TSSB, state securities regulators and Canadian provincial regulators can participate in the settlement. Amanda Senn, Chair of the North American Securities Administrators Association (NASAA) Enforcement Committee, commended the working group and stated that the resolution of the case would remind businesses to comply with securities laws.
NASAA is a voluntary non-profit organization, and one of the oldest organizations created specifically for investor protection. It is made up of state and provincial securities regulators in the US, Mexico, and Canada.
AlixPartners, who was involved in FTX’s bankruptcy management, will administer the GSB settlement process.
