GS Partners to Refund $1B to Investors After State Settlement

GS Partners, a cryptocurrency investment entity based in Europe, has reached an agreement to fully refund all investors as part of a settlement involving five U.S. states.

The settlement will require the firm to reimburse 100% of investor deposits in exchange for the dismissal of all civil lawsuits and ongoing investigations.

Full Refunds for Investors

This settlement was announced on Monday by the Texas State Securities Board (TSSB) and includes Texas, Alabama, Arizona, Arkansas, and Georgia. All clients who invested in GSB’s offerings are eligible to reclaim their funds, contingent upon their state or Canadian province’s participation in the settlement.

Joe Rotunda, the enforcement director at the TSSB, stated in an interview with Bloomberg, “We have negotiated a settlement that guarantees that all clients in any state or province that joins the settlement receive 100% of their deposits, minus any withdrawals.”

“This is essentially a North American settlement. It is uncommon to achieve pure financial relief on such a large scale. This is exceptional.”

As per the Bloomberg report, the alleged scheme was valued at approximately $1 billion.

The claims process will be managed by AlixPartners LP, a firm with a track record in handling notable financial recovery cases, including the fallout from Bernie Madoff’s Ponzi scheme and the 2022 collapse of cryptocurrency exchange FTX.

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

“Our objective is to locate all clients and ensure they are informed about this process,” Rotunda added. “They have the opportunity to retrieve their funds,” Joe remarked.

Unsuccessful Investment Ventures

Among the various cryptocurrency-related initiatives was a notable attempt to tokenize fractional ownership of a 36-story skyscraper in Dubai. Marketed as a means for investors to earn passive income from leasing units in the skyscraper, each token represented a single square inch of the building.

Described as “magnificent” and “inspired by the desert’s breezes,” the “G999 Tower” generated substantial interest. However, the project failed to secure the needed $175 million from token sales, and the value of these tokens quickly diminished, leaving investors with nearly worthless assets.

Hundreds of thousands of investors across the U.S. and Canada were affected by the fallout of this and other offerings, including crypto tokens linked to a staking pool in the “Lydian World” metaverse and a gold-backed cryptocurrency.

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