US, Canadian investors to get full compensation in GSB Group settlement

Securities regulators in 12 US states have secured reimbursement for investors who lost money in an investment scheme that included the Lydian.World metaverse, cryptocurrency and the tokenized partial ownership of a metaverse skyscraper.

According to the North American Securities Administrators Association (NASAA), the regulators reached a settlement with a group of German companies associated with Josip Heit and known collectively as the GSB Group for the return of all money and cryptocurrency deposited with GSB Group for any purpose.

States, provinces work together against MLM scheme

According to a statement released by the legal representatives of Heit and GSB Group, US investors in the settling states will receive compensation and those states “will withdraw all prior allegations of fraud or dishonest practices.”

Heit and his companies will not pay any penalties under the settlement. That statement named the states of Alabama, Arizona, Arkansas, Georgia and Texas as participants in the settlement.

The NASAA said regulators from Alabama, Arizona, Arkansas, California, Georgia, Kentucky, Mississippi, New Hampshire, Texas, Utah, Washington and Wisconsin took part in the settlement.

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Those regulators, along with the British Columbia Securities Commission in Canada, began filing enforcement actions against the German group in November. The regulators described the GSB Group offering as a multilevel marketing (MLM) scheme.

A North American settlement

Bloomberg reports that GSB Group began freezing withdrawals in October. Bloomberg quoted Joe Rotunda, Texas State Securities Board enforcement director and NASAA vice chairman, as saying:

“We have negotiated a settlement that will ensure that all clients in any state or province that join the settlement receive 100% of their deposits, less any withdrawals. This is really a North American settlement.”

According to Bloomberg, “hundreds of millions of dollars” will be returned to investors. It added that “hundreds of thousands of investors in the US and Canada” had been affected by the scheme.

Investors will have 90 days to file a claim against the group. The German group claims to have more than 800,000 investors from more than 170 countries and transactions worth close to $1 billion.

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