Quote:
Originally Posted by Skillet83
The last one (smartlands) is a fun one. May get wiped out, but upside is huge. Platform is up now, (partially), properties listed, tier 1 exchange announcement within 30 days, wallet by end of month with staking. Go to smartlands.app, click on "news" at bottom. Exciting stuff.
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Indeed. I came up with an idea nearly identical to this one about a year or two ago. Simply put - a crypto currency that is backed by real estate. Basically, you can theoretically monetize / cash out your real estate portfolio using a coin and (most likely) capitalize on the crypto craze to generate a higher-than-book-value return. Sounds brilliant, and it pretty much is.
The trouble is, it's also not legal. The problem lies in the fact that this is actually an unregulated security. Using crypto to securitize an asset is no different, in the eyes of the US government, than using paper. The securities laws are setup to prevent any pump-and-dump house from selling pieces of garbage to unknowing investors. This strategy, although very smart, runs afoul of that (most likely). In theory, the crypto should be no different than a publicly traded REIT, which (supposedly) follows the book value of the underlying asset.
This indeed can probably devolve into a detailed discussion about securities law. I have a few investments that are targeted towards "accredited investors" - these are REITs (Real Estate Investment Trusts), and a fund on mezzanine loan financing (in-between traditional banks and hard-money lenders). All of these funds require each investor to certify and prove that they are an "accredited investor", which means they have a certain minimum income level, or have a certain minimum amount of assets held somewhere else. These industries are audited often (my friend is the General Partner of one of them), and they cannot muck around with the SEC, otherwise one ends up going to jail. I'm not sure if these "real estate backed coin" efforts are located in the United States, but if they are, then they are probably an unregistered security and are probably not legal.
Someone who is a securities attorney might want to weigh in on this. My own experience is limited to the time I worked on Wall St. when I was much younger. At least here in the US, you just can't do this type of thing right now. Maybe they are trying to work within the framework of the Obama 2012 Reg A+ offerings? Or perhaps a 506(c)? My friend tried to do this with a company he had called "Asset Avenue" which was supposed to be "crowdsourcing" real estate. The legal and regulatory headaches killed that idea off fairly quickly because it wasn't legal to pitch the investments to non-accredited investors.
Don't know. Maybe Congress will eventually relax the laws on this, but for now, it's a bit difficult to legally do something like this...
More links / info:
https://www.sec.gov/info/smallbus/secg/accredited-investor-net-worth-standard-secg.htm
https://www.seedinvest.com/blog/jobs-act/raising-capital-reg-a-mini-ipo
https://www.holloway.com/g/angel-investing/sections/exemptions
-Wayne