Five US states have reached a settlement with the owner and operators of an alleged $1 billion cryptocurrency investment scheme.
The plan, led by Josip Hit and his GSB group, lured investors with promises of tokenized fractional ownership in a skyscraper, investments in the metaverse, and a cryptocurrency that was allegedly convertible into gold, According to To Bloomberg
Under the terms of the settlement and in accordance with press releaseHeit and GSB will agree to cease and desist from offering or selling unregistered securities in the settled states without “admitting or denying any violations of law” by GSB.
Avi Perry and Alex Spiro, attorneys representing Hitt and GSP, announced that the states agreeing to the settlement will withdraw all previous allegations of fraud or unfair practices as part of the settlement.
No financial penalties will be imposed – instead, Heit and GSB have agreed to compensate all eligible US customers in the settled states.
“We welcome this settlement… We are committed to refunding all eligible customers through the claims process. Our customers always come first. Protecting our brand, our reputation and our customers is our top priority.”
Joseph Heit, Chairman of the Board of GSB Germany
Cryptocurrency Scam Details
The plan, which involved hundreds of thousands of investors, collapsed after failing to raise the $175 million needed by selling cryptocurrencies tied to the skyscraper project. Subsequent trading losses reported by GSB in October 2023 exacerbated the situation, restricting withdrawals for many investors, according to Bloomberg.
The current settlement covers Texas, Alabama, Arizona, Arkansas and Georgia, according to the Texas Securities Commission. If a customer’s state or county becomes part of the settlement, those who invested in any of GSB’s products — from crypto tokens to educational software — should be eligible for a refund.
The Texas Securities and Exchange Commission, which led the investigation, said the settlement aims to ensure that investors in the United States and Canada receive 100% of their deposits, minus any withdrawals.
AlixPartners LP, known for handling the claims process in the Bernie Madoff and FTX cases, will manage the recovery.