GS Partners to refund investors in $1 billion crypto scheme after settling with 5 US states

GS Partners, a Europe-based entity involved in multiple cryptocurrency investment schemes, has agreed to refund all funds to investors in a settlement with five US states.

The settlement will allow the company to return 100% of investors’ deposits in exchange for the dismissal of all ongoing civil lawsuits and investigations.

Investors will receive full refunds

This agreement was announced Monday by the Texas State Securities Board (TSSB) and includes the states of Texas, Alabama, Arizona, Arkansas and Georgia. Any customer who has invested in GSB’s offerings will be eligible to get their funds back, as long as their Canadian state or province participates in the settlement.

Joe Rotunda, chief executive officer of the TSSB, explained in an interview with Bloomberg: “We have negotiated an agreement that will ensure that all customers in any state or province that join the agreement will receive 100% of their deposits , minus any withdrawals,” he said. he said

“This is truly an American settlement. We don’t often get a chance to get pure financial relief on a large scale. That’s rare.”

According to the Bloomberg report, the alleged scheme was worth about one billion dollars.

The claims process will be overseen by AlixPartners LP, a firm experienced in handling high-profile financial recovery cases, including the aftermath of Bernie Madoff’s Ponzi scheme and the 2022 bankruptcy of the cryptocurrency exchange FTX.

AlixPartners will conduct blockchain analysis to ensure that all affected investors are identified and can claim their refunds.

“Our goal is to identify all customers and make sure they are aware of this process,” Rotunda added. “They have a chance to get their funds back,” Joe said.

Failed investment schemes

Among the various crypto-related ventures was a high-profile attempt to represent partial ownership of a 36-story skyscraper in Dubai. Promoted as a way for investors to earn passive income from rental units in the tower, each token represented one square inch of the building.

Described as “glorious” and “inspired by the desert winds,” the “G999 Tower” attracted significant interest. However, the project failed to raise the required $175 million through token sales and the value of the vouchers soon plummeted, leaving investors with almost worthless assets.

Hundreds of thousands of investors in the United States and Canada were affected by the collapse of this and other offerings, including crypto tokens linked to a group of holdings in the “Lydian World” metaverse and a gold-backed cryptocurrency.

Operating as a multi-level marketing (MLM) scheme, GS Partners relied heavily on celebrity endorsements, including one from former professional boxer Floyd Mayweather, to promote these companies.

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