In a significant development, Texas and four other states have reached a critical settlement with the operators of an alleged $1 billion illicit cryptocurrency investment scheme.
According According to Bloomberg, the Texas State Securities Board revealed details of this deal, highlighting a venture involving tokenized partial ownership of a skyscraper, among other investment avenues.
In this case, regulators would be seeking to recover the financial losses suffered by numerous investors who participated in the project.
Regulators seek full refund for cryptocurrency investors
The announced agreement with Josip Heit, the owner of the GSB Group, and its associated companies covers a range of products, including Token-based property of a high-rise building, investments in the metaverse, and a cryptocurrency that could supposedly be used to earn rewards convertible into gold.
Joe Rotunda, director of compliance for the Texas State Securities Board, stressed the scope of the impact, noting that “hundreds of thousands” of investors in the United States and Canada have borne the brunt of the ordeal.
The negotiated agreement ensures that all customers who choose to join receive full payment. refund of your deposits, less any withdrawals.
Among the allegations against the project is that it failed to raise the necessary $175 million by selling crypto assets representing fractional ownership of a skyscraper, resulting in substantial losses for investors who own these assets.
In addition, GSB’s announcement of losses linked to trade and alleged restrictions on investors’ ability to withdraw certain profits in October 2023 further aggravated the situation.
The conciliation process will begin soon
The agreement, which includes Texas, Alabama, Arizona, Arkansas and Georgia, covers clients who invested in any of GSB’s offerings, from cryptocurrency tokens to educational programs.
According to the report, state and provincial regulators launched a collaborative investigation into the scheme in October 2023, culminating in Texas filing a lawsuit. enforcement action next November.
AlixPartners LP, which is in charge of administering the claims process, has experience in managing similar initiatives, having overseen the compensation of Bernie Madoff’s clients and carried out Blockchain Analysis of the bankruptcy proceedings of the defunct cryptocurrency exchange FTX in 2022.
Joe Rotunda reiterated the main goal of the claims process: to reach all affected customers and facilitate their participation in recovering their funds. The door remains open for any Canadian state or province interested in joining the settlement, and the official process will begin shortly with no clear date provided.
At the time of writing, the total cryptocurrency market capitalization stands at $1.95 trillion, after falling to $1.81 trillion late last week. Similarly, the largest cryptocurrency in the market, Bitcoin (BTC), reclaimed the $56,000 mark on Monday, recording a price recovery of almost 5% over the past 24 hours.
Featured image of DALL-E, chart from TradingView.com
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.