Regulators in Texas express concern over a real estate token offering that failed to raise the anticipated $175 million.
Regulators state that GS Partners utilized an extensive marketing strategy, employing a multilevel marketing scheme with generous commission payouts to promote the products.
The Texas State Securities Board has accused a network of companies operating under the "GS" brand from Germany, led by Josip Dortmund Heit, of engaging in fraudulent activities related to digital assets, staking pool investments, and a proprietary metaverse. According to regulators, the companies, including GS Partners, GS Smart Finance, and GS Wealth, conducted three rounds of metaverse property sales in 2021. Investors were offered XLT Vouchers or BNB Chain tokens, representing ownership of a square inch in the G999 Tower metaverse, at 9.63 Tether per voucher. However, the tokens rapidly lost value, dropping to less than 0.0000049 USDT on PancakeSwap after the companies failed to reach their $175 million fundraising target.
Regulators claim that the companies, including GSB, offered unregistered securities, such as Lydian World metaverse tokens, gold tokens, G999 coin, and Elemental Certificates. The Texas State Securities Board has initiated an emergency enforcement action, demanding that the GSB group cease and desist from such activities in the state. The Ontario Securities Commission had previously issued a warning on August 15, stating that GS Partners was not registered to do business in Ontario, and warnings were also issued by securities regulators in Canadian provinces including Saskatchewan, British Columbia, Alberta, and Quebec.