Hamburg-based GSB Gold Standard Banking Corporation AG offers 2.5 percent a year as a reward to customers who store coins of its cryptocurrency G999. GSB is not a bank, although the name suggests it, and also has nothing to do with cryptocurrencies, according to the commercial register.
Commercial with actress Sophia Thomalla
In a commercial of GSB Gold Standard Banking Corporation AG from Hamburg, the presenter and actress Sophia Thomalla enters GSB business premises with an energetic step and opens an account for cryptocurrencies with GSB CEO Josip Heit.
She receives a golden hammer with which she knocks out a G999 coin from a golden lump. G999 is the name of GSB's cryptocurrency. But the term also includes "a uniquely electronic system, card reader and app," according to the company's presentation, which also enables fast payments and much more.
Rewards promised for holding coins
In a "white paper", a document describing G999, GSB explains what the system will offer customers. For example, a crypto credit card is supposed to work like a savings account. GSB offers customers who store at least 249,999 coins of their cryptocurrency G999 2.5 percent a year as a reward in the form of G999 coins.
Those who provide a digital node (masternode) that enables decentralized processes around the G999 blockchain and hold at least 749 999 G999 coins for a year will receive as much as 7.5 percent reward in the form of G999 coins a year. The coins thus created will later be exchangeable for real gold in partner gold stores.
On February 15, 2021, G999 was trading at about 1.1 cents on the website Coinmarketcap.com. So investors would have had to spend a good 2,700 euros and a good 8,200 euros, respectively, on the minimum number of coins on that day to get the reward.
Investors can get the wallet required to buy, store and sell them, special software from GSB. The quotes for such coins fluctuate greatly. It is possible that when selling, investors get significantly less euros than they put in. It is also possible that no buyer can be found at the desired time.
GSB is not a bank, despite its name
GSB is not a bank, despite its name. A spokeswoman for the Federal Financial Supervisory Authority (BaFin) clarified to Finanztest that GSB Gold Standard Banking Corporation AG "does not have a license to offer banking and/or financial services transactions in Germany."
It also referred to sections 39 and 40 of the German Banking Act. These stipulated that only companies licensed under the Banking Act may use the terms "bank", "banker", "credit union" and "savings bank" as an addition to their company name, to designate their business purpose or for advertising purposes.
The purpose of this provision is clear: to prevent prospective customers from believing that they are doing business with a financial institution that is subject to supervision and strict rules, when this is not the case. GSB does not use the prohibited terms, but it does use the English term "banking corporation", which banks abroad have in their name or use in the English translation of their name.
No reference to cryptocurrencies in the object of the company
According to the commercial register, GSB does not even have anything to do with cryptocurrencies. GSB was created at the end of 2017 from GCC Gazella Corporate Capital GmbH from Düsseldorf.
The registered object of the company is "the manufacture, import, export and distribution of chemical products, plastics, pesticides, chalk and fillers, dyes, pharmaceutical and other products, as well as rare metals and gold, from, to and in the German market, as well as the financing of domestic and foreign companies of the Gazella Corporate Capital Group (including borrowing money for this purpose)."
GSB chief previously worked for controversial crypto firm
In any case, GSB CEO Josip Heit has already been involved with cryptocurrencies and gold. Handelsblatt described him as a businessman with a "tricky past". That's because Heit appeared as "chairman of the board" of Stuttgart-based crypto company Karatbars, which specialized in selling small gold bars and gift cards with gold and ventured into the topic of blockchain and cryptocurrencies.
He commented on a "KaratGold Coin" issued by the Belize-based Karatbit Foundation, and criticized an October 2019 decision by the German Federal Financial Supervisory Authority (BaFin), which had ordered Karatbit to stop and wind down the e-money business it was operating without permission in Germany by issuing the "KaratGold Coin." Karatbars CEO Harald Seiz announced that he would not comply.
Finanztest inquiry remains unanswered
At present, however, Stiftung Warentest has discovered no more reference to the coin on the company's website. BaFin had already pointed out in 2015 that Karatbars did not have BaFin's permission for the business and was not subject to its supervision.
On various English-language websites that were directly linked to the website of Karatbars International GmbH, claims had been made that "Karatbars International" had been recommended or approved by BaFin. This did not correspond to the facts, BaFin said at the time. GSB did not answer an inquiry from Finanztest as to how G999 differed from this, nor did it answer other questions about the offer.
Conclusion: Since the wrong impression of a kind of fixed interest rate of a bank could arise with prospective customers, we put GSB on the investment warning list.