North American regulators secure compensation for victims of GSB Group crypto scam
Investors from the United States and Canada who lost money in a suspected fraudulent investment scheme run by the German-based GSB Group will soon receive full compensation.
The settlement comes after securities regulators from multiple U.S. states and Canadian provinces took legal action against the company, accusing it of operating a multi-level marketing (MLM) scheme involving cryptocurrencies and metaverse projects.
The North American Securities Administrators Association (NASAA) announced that regulators from 12 U.S. states, including Texas, California, Georgia, and Washington, reached a settlement with the GSB Group, led by Josip Heit.
These actions were supported by the British Columbia Securities Commission in Canada, showing a collaborative effort across borders to protect investors from deceptive financial practices.
The settlement ensures that all U.S. and Canadian investors who participated in the scheme will receive 100% of their deposits, minus any withdrawals already made.
According to Joe Rotunda, Director of Enforcement for the Texas State Securities Board and Vice Chairman of NASAA, “This settlement guarantees full reimbursement for every investor who joins the settlement, making it a North American resolution.”
The GSB Group, which promoted investments in cryptocurrency, the Lydian. World metaverse, and tokenized ownership of a digital skyscraper, was accused of misleading investors through an MLM structure.
Regulators began filing enforcement actions against the GSB Group in November, following reports that the company had been freezing investor withdrawals since October.
They alleged that the group used high-pressure sales tactics and deceptive marketing to attract hundreds of millions of dollars from investors across North America.
However, under the terms of the settlement, the GSB Group and its associated companies will not face any financial penalties.
The states involved in the settlement will also withdraw any previous allegations of fraud or dishonest practices against the group. This decision has raised some eyebrows, as many investors and observers expected harsher consequences for the company.
Investors now have 90 days to file a claim against the GSB Group to recover their lost funds.
The group claims to have more than 800,000 investors globally, with transactions amounting to nearly $1 billion.
The settlement provides a measure of relief for the hundreds of thousands of affected investors in the U.S. and Canada, but it also highlights the ongoing risks associated with investing in emerging technologies like cryptocurrency and the metaverse.
