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BitBond and Klickown to Tokenize German Real Estate

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Digitized Real Estate

A pair of German companies, involved directly with digital securities, has recently announced an upcoming investment opportunity.

Bitbond and Klickown have let the world know that as early as January 2020, they will be facilitating the tokenization of real estate.  The pair has indicated that there will be various collaborations in the future, with this simply being a ‘jumping off’ point.

The Finer Points

The event will see the sale, and distribution, of debt instruments in the form of digital bonds, backed by German real estate.

The following points outline a few of the finer details pertaining to the opportunity.

  • Issued on the Stellar blockchain
  • Regulated through BaFin
  • €10 minimum investment
  • 4-7% yearly return
  • 3-10 year term with principal payout upon maturation
  • Residential Property found in Lünenburg

A Stellar Choice

An interesting note from their announcement is the decision to use the Stellar blockchain.  In recent months, the digital securities sector has demonstrated a proclivity for using Stellar for their operations.  The following articles are just two examples of this, demonstrating adoption both within, and beyond, the borders of Germany.

Tokenizing London Penthouses and Greek Island Villas

Stellar Chosen by Wevest for Security Token Offering Platform

Commentary

Upon announcing their upcoming project, representatives from each, Bitbond and Klickown, took the time to comment.

Radoslav Albrecht, CEO of Bitbond, stated,

“We have significantly enhanced Bitbond following our successful STO and the approval of our securities prospectus for BaFin’s first tokenized bond…We see a tremendous demand from financial service providers and issuers to digitize the bond issue process. With our technology, we enable tokenized proof of ownership of securities, while reducing the number of intermediaries required…We are very pleased to work with such an experienced team of real estate and financial professionals.”

Wladimir Huber, Executive Director of Klickown, stated,

“For example, we can do without classic components of a real estate issue such as global certificates or expensive bank deposits. Instead, we rely on transparency and flexibility. Thanks to these enormous cost savings, we are able to offer our investors higher returns. KlickOwn investors invest completely digitally and simply with us. After selecting their dream property, they are not dependent on the performance of a fund manager, as is the case with real estate funds, for example benefit like real property owners. The entire property management, ie asset management and property management, takes over KlickOwn.”

Speaking with Radoslav

We were fortunate to have recently had an exclusive article penned and published on our site by Bitbond CEO, Radoslav Albrecht.

In this article, he discussed the path travelled by Bitbond, on their way to completing the first regulated STO within the nation.  By achieving this, they have essentially generated the blueprint for industry dos and don’ts – and are happy to share it.

How to Get an STO Approved by German Regulators

German Participation

Recently, a study was completed by industry participants, Blockstate and the Frankfurt School Blockchain Center.  The focus of which was to establish the state of digital securities based on geography.

The takeaway was that Europe is leading the way, with the highest levels of industry participation and adoption.  When looking at those within Europe, one country was alone at the front of the pack – Germany; the same nation which, both, BitBond and KlickOwn call home.

EU Takes the Lead over the US in Security Token Sector

BitBond

Launched in 2013, Bitbond maintains operations within Germany.  Hard work put in by the team behind the company allowed for Bitbond to successfully complete the first regulated STO within Germany.

CEO, Radoslav Albrecht, currently oversees company operations.

KlickOwn

Founded in 2019, KlickOwn is a young company which maintains headquarters in Hamburg, Germany.  Operations maintain a focus on their goal of developing a decentralized real estate marketplace, through the integration of real world assets and blockchain technologies.

Executive Director, Wladimir Huber, currently oversees company operations.

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Security Tokens

Lawsuits Goes After Some of the Largest Names in Crypto

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Lawsuits Allege Wrongdoing of Major Crypto Platforms

In what appears to be a broad swipe at the crypto sector this week, multiple lawsuits filed with the Southern District of New York claim wrongdoing against a myriad of blockchain-based firms. The class-action lawsuits allege wrongdoing on the part of crypto heavyweights such as Binance, Block.one, BitMEX, KayDex, BProtocol, Status and TRON Foundation, just to name a few.

According to court documents, the latest suit lists three plaintiffs – Chase Williams, Alexander Clifford, and Eric Lee. Interestingly, Roche Freedman is the firm heading the lawsuit. You may recognize the name from their recent lawsuits against Bitfinex and Tether. Additionally, they led the cases against Craig Wright and Bitfinex in the past.

Crypto Lawsuits – Details

The new lawsuit lists eleven companies in violation of regulations. These companies span the entire crypto sector.  Tokens such as ELF, CVC, TRX, TOMO, SNT, and others are listed for their use of IEO and ICO models in the past. The suit claims these tokens are unregistered securities. As such, the token made agreements with exchanges in violation of Section 5 of the Exchange Act.

Section 5 via Cornell Law School

Section 5 via Cornell Law School

The violations also extend to the named exchanges. The lawsuit lists KuCoin, Block.one, Quantstamp, Civic, and Binance as exchanges who sold unregistered tokens. Plaintiffs argue that these exchanges didn’t possess the required broker-dealer license in the U.S. Importantly, the plaintiffs believe that the SEC clarified in the past that the listed tokens are securities.

The suit also lists several crypto stars specifically. For example, Changpeng Zhao (CEO Binance), Vinny Lingham (CEO Civic), Justin Sun (TRON), Brendan Blumer (Block.one) and Dan Larimer (EOS) are all named in the suit.

Serious Allegations

The allegations are not trivial, For example, the trio argues that tokens such as TRX deceived investors about their purpose and level of decentralization. The suit claims that the centralization was “not apparent at that time.” It was only after the passage of time that investors gained the necessary insight to determine this. The suit states that there was a clear delay before the “issuer’s intent, the process of management, and success in allowing decentralization to arise”  become apparent. In this way, the allegations state investors were “misled into believing that TRX was something other than security when it was a security.”

Taking on the Crypto Industry

This case appears to be an attack on some of the most important firms, exchanges, tokens, and people in the crypto sector. The large scope of allegations and the global nature of the case will cause delays along the way. Consequently, it could be a while before this trial makes its way to the courtroom.

Lawsuits for the Stars

It’s hard to imagine a scenario in which the plaintiffs win this case. They would need to establish numerous precedents during the trial. These new rulings could stifle innovation in the US blockchain sector for years to come. As such, you can expect to see a measured response to this lawsuit in the coming weeks.

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Security Tokens

STOMarket Adds Mt Pelerin – MPS Token

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STOMarket lists Mtperelin

This week, the research and analytics firm, the STOMarket announced the addition of the first international security token to its tracker. Importantly, researches chose the Swiss tokenization platform, Mt Pelerin Group as the project to receive this honor. Now, potential, and current MPS token investors can monitor market developments easier than ever before.

Currently, the STOMarket hosts the largest repository of live security token data available globally. The firm has held on to this title since it first entered the market in 2018. Importantly, the group was the first data aggregator in the digital securities industry. As such, STOMarket researchers gathered primary offering data for over 300 STOs to date.

Mt Pelerin Group SA Tokenized Shares

The decision to list MPS tokens makes sense for a number of reasons. Primarily, the Mt Pelerin Group SA is one of the first tokenized shares to provide direct and full ownership to token holders. This strategy differs greatly from companies that utilize tokens simply as a form of tethered ownership rights. In this instance, the token is the actual share.

MPS Token

As part of the strategy, the Mt Pelerin Group tokenized its 2018 cap table. Interestingly, 5% of these tokenized shares were sold at a public offering. Importantly, no US investors were permitted to participate in the event. Notably, the group chose to make MPS tokens ERC-20 compliant.

MPS Token Data via STOMarket

MPS Token Data via STOMarket

Currently, Ethereum host the largest number of security tokens in the market. As such, ERC-20 compliant tokens enjoy added interoperability when compared to other protocols in the space. This interoperability comes in the form of more wallets, Dapps, and platform options. Already, the MPS token trades on the Uniswap Decentralized Exchange.

Mt Pelerin Joins the Ranks – STOMarket

Discussing the important milestone, Arnaud Salomon, CEO of Mt Pelerin stated that his team was “thrilled” to see the MPS token listed on stomarket.com. He described how this decision places his project in line with other “industry trailblazers.” Lastly, he described how the addition allows investors and analysts to monitor this unique token’s growth.

STOMarket Growth

Not surprisingly, the STOMarket continues to expand its role in the market. For example, in 2019, the firm launched support for secondary trading transactions. Immediately, investors gained access to important data on the six largest security tokens in the market. Since then, the group has added multiple tokens. Today, the firm is building advanced support for hourly security token pricing, trading volume, and market cap updates internationally.

Future Listings

As part of the STOMarket’s early response strategy, the company works closely with security token issuance platforms and exchanges. Notably, the firm has data partnerships with MERJ, BlockStation, Tokenise, just to name a few. Discussing the important role the company plays, Marko M. Hafez, Co-Founder and CEO of Blockstation explained how researchers took the “initiative to centralize and publicize STO and Tokenized IPO listing.”

STO Data Access

Providing the STO market with live trading data continues to be a critical role in the space. Thankfully, the STOMarket makes it easy for anyone to monitor and share data on developments in the industry. You can expect to see these researchers play a more pivotal role in the market as STO adoption continues to expand in the coming months.

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Security Tokens

FINMA Releases Annual Report – List Security Tokens and DLT

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FINMA Releases Annual Report - List Security Tokens and DLT

This week, the Swiss Financial Market Supervisory Authority (FINMA) published its annual report for 2019. Interestingly, the report highlights developments surrounding security token offerings (STO) and distributed ledger technology (DLT). The news falls in line with efforts by Swiss regulators to further develop the country’s blockchain sector.

Challenging Questions

Discussing the results of the report, FINMA officials pointed out that there continues to be “challenging questions” the group encounters. Specifically, regulators face questions regarding the trade, custody, and settlement of different token types. Additionally, FINMA continues to receive questions about possible licensing requirements pertaining to the central securities depository pursuant to Art. 61 of the Financial Market Infrastructure Act (FMIA).

Importantly, FINMA regulators believe that tokenized securities need to be met with an updated regulatory framework. Specifically, regulators would like to create a new licensing category for institutions looking to trade, settle and custody securities under a single entity. These concerns are echoed by US regulators who also face tough questions regarding streamlining the securities settlement process for tokenized assets.

Stablecoins Are in the Spotlight

Also, the FINMA report gives special attention to the emerging market of stablecoins. Stablecoins are tokenized assets that are pinned to real-world assets such as gold, or in most instances, fiat currencies. Stablecoins have been in the spotlight lately as a myriad of major non-governmental concepts have come to light. Specifically,  Switzerland is home to Libra, Facebook’s stablecoin project. As such, regulators seek to control, but not stifle these efforts.

ICO Data

FINMA also included data on initial coin offerings (ICO) for the year. Importantly, there were 1185 individual ICOs that took place last year within the group’s jurisdiction. Of these ICOs, the group started investigations into approximately 60. Out of the 60 investigations, 30 resulted in enforcement actions. Surprisingly, these numbers are a decrease over 2018. In 2018, 42 investigations concluded in enforcement actions.

FINMA Releases 2019 Report

FINMA Releases 2019 Report

Specifically, FINMA identified a breach of the Anti-Money Laundering Act (AMLA) in around 10 ICOs. Another 8 cases narrowly missed prosecution but did make it to FINMA’s warning list. Ultimately, FINMA brought enforcement proceedings against three firms in 2019.

Increased Enforcement

Interestingly, this year’s report highlights a focus on the secondary-markets regarding digital assets. The group continues to explore structuring for the trading and custody of these tokens. As such, regulations continue to develop surrounding the operation of trading venues and other security token associated support activities.

FINMA

FINMA continues to play a pivotal role in security token adoption in the EU. Currently, the group oversees over 29,200 financial services firms and products. These products include a diverse range of blockchain-based applications. Additionally, FINMA has been actively collaborating with the Swiss Federal Council to develop a framework for blockchain tech through amendments to the current federal laws.

FINMA – A Step Ahead

FINMA’s forward-looking stance and flexibility in regards to the STO sector has allowed Switzerland to remain a financial hub for blockchain activity within the EU. Given the overall tone of Swiss regulators, it’s apparent that this group seeks to increase blockchain integration to new levels. As such, you can expect to see Switzerland retain its title as a global financial powerhouse for years to come.

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