38° and Partly Cloudy
NJ Residents Eligible for Full Refund from GS Partners Following Multistate Securities Settlement
New Jersey Attorney General urges state investors to redeem digital asset investments as part of a multistate agreement with GS Partners
New Jersey residents who invested with GS Partners, a Germany-based fintech company, are being encouraged to seek full refunds following a multistate investigation into alleged securities law violations by the company. Attorney General Matthew J. Platkin, along with the Division of Consumer Affairs and its Bureau of Securities, announced the settlement, which requires GS Partners and related entities to return all funds invested by New Jersey residents in digital assets and metaverse-based products.
“The creators of innovative investment products derived from evolving technologies in the securities market are not exempt from the laws that pertain to traditional securities,” said Attorney General Platkin. “The settlement in principle announced today demonstrates New Jersey’s continued commitment to protecting New Jersey investors and maintaining the integrity of the state’s securities market by investigating and putting a stop to entities that attempt to skirt our laws through the unlawful sale of investment products tied to new technologies.”
The investigation revealed that GS Partners, operating under GSB Gold Standard Corporation AG and GSB Gold Standard Bank LTD, promoted a range of crypto-linked investments, including virtual metaverse land plots in “Lydian World,” token staking pools, and certificates advertised as representing shares in physical assets, like a skyscraper. The products allegedly promised investors attractive returns and “passive income” incentives, which enticed further investment but were not registered as securities.
“Investors excited to jump on the bandwagon of cutting-edge investment products are, unfortunately, sometimes easy targets for scammers looking to cash in on that excitement,” said Cari Fais, Director of the Division of Consumer Affairs. “Through agreements like this one, we’re raising public awareness of the risks associated with investment opportunities that use the latest technology and promises of high returns to entice investors.”
Under the settlement, GS Partners is to notify New Jersey investors to liquidate or withdraw their assets from its platforms and to facilitate a claims process, which will be managed by AlixPartners LLP. Refunds will be issued based on the total amount invested, minus any prior withdrawals. Claims are expected to open in early November, and the refund process will not incur additional charges to cover administrative costs.
“This agreement, in effect, is designed to make New Jersey investors whole,” said Elizabeth M. Harris, Bureau Chief. “Anyone who purchased products or services from the GSB is strongly encouraged to take advantage of this opportunity to reclaim their investment funds.”
GS Partners has also agreed to cease offering unregistered securities to New Jersey residents unless it meets required registration or exemption conditions. Once all settlement terms are fulfilled, GS Partners will enter a formal consent order with the Bureau of Securities to end further sales of unregistered securities in New Jersey.
The Bureau of Securities, tasked with safeguarding New Jersey investors, encourages residents to verify the registration and disciplinary records of financial professionals through its website, www.NJSecurities.gov, or by contacting 1-866-I-INVEST.
