Collateralized Real Estate
With investors continually seeking means of financial return, a trend has emerged surrounding U.S based real estate. This is the concept of ‘flipping’ a home/property.
The concept is simple – buy a home in disarray at a discount, strategically renovate, and sell the home for more than the cost of purchase and renovations. This model has proven quite lucrative, and shows no signs of going out of fashion.
OpenLTV has recognized this and developed a platform aimed towards giving investors access to such opportunities. This is made possible through the issuance of digital securities, which represent fractionalized ownership of real estate backed debt. These tokens are ERC-20 based, which means they are issued on the popular Ethereum network. With this being the most commonly used protocol, it is expected that support for secondary trading in future months should be supported.
OpenLTV indicates that through the use of its platform, investors can expect to generate returns in the 8-12% range per year.
Stablecoin of Choice
While investors have the ability to invest through the OpenLTV platform with cryptocurrency, a stablecoin of choice is needed to facilitate interest payments etc. OpenLTV has chosen PAXOS to be this stablecoin.
PAX tokens are ERC-20 based tokens, allowing for widespread support throughout the industry. Paxos issues monthly ‘attestation reports’, along with undergoing regular audits. These steps are taken to ensure transparency, allowing investors to verify that funds are indeed backed 1:1.
Upon announcing the launch of their platform, OpenLTV CEO, Kirill Bensonoff, took the time to issue the following statement.
“The OpenLTV platform will simultaneously allow us to tap into a global pool of investors and unused crypto-asset liquidity…We are thrilled to be partnering with the Paxos team to bring a long-standing and secure investment option in the real estate industry to the financial future.”
In addition to their issued statement, we reached out to OpenLTV for further comment on this development. The following is what CEO, Kirill Bensonoff, had to say.
Q: With the various stablecoin options available, why was PAXOS chosen to partner with?
A: “We have used PAX previously, and were impressed with what they have built. We were looking for a trusted company with regular audits that had verifiable 1:1 USD backing, and a great platform, and they were it.”
Q: How will clients benefit through use of the OpenLTV platform versus more traditional means of investing, such as REITs?
A: “There are a number of differences OpenLTV is issuing on the blockchain, where all transactions and interest payments are open and immutable, bringing a new level of trust and global access. Investors can choose what loans they want to back, unlike with a REIT, which makes all of the divisions and charges more costly. The loans offered on the OpenLTV platform will be short term and at a high-yield. This enables investors to avoid risk, shortens the time before they get their investments back to 12-24 months, and subjects them to less market volatility.”
OpenLTV is a Boston based company, which was founded in 2019. This young company has developed a platform allowing for qualified investors to gain exposure to U.S based real estate through fractionalized ownership.
Company operations are overseen by CEO, Kirill Bensonoff.
Paxos is a New York based company which was launched in 2012. The company states that their mission is ‘creating a global, frictionless economy’. This led to the development of Paxos Standard (PAX). These are digital tokens, which act as stablecoins pegged to the U.S dollar.
Company operations are overseen by CEO, Charles Cascarilla.
In Other News
While OpenLTV appears to be a promising platform through which investors can invest in debt-backed real estate, they are not the only ones to tackle this industry. Real estate has proven to be one of the most possible industries to be tackled by digital securities – and with good cause. The illiquidity, yet potential high-return of real estate makes it a perfect candidate for beneficial blockchain implementation. Here are a few examples of companies tackling real estate through digital securities.
BitClave Reaches Settlement with SEC over 2017 $25M ICO
This week, BitClave PTE Ltd. reached a settlement with SEC regulators. As part of the agreement, the company must return funds acquired in its 2017 ICO in which the firm secured $25 million. The news showcases further SEC interdiction into the crypto sector. Additionally, it demonstrates some long-awaited relief for the BitClave project.
According to the SEC filing, BitClave violated US securities regulations when they hosted the event. Specifically, regulators charged that the Consumer Activity Tokens (CAT) received by investors were, in actuality, unlicensed securities. Importantly, the firm’s ICO saw investment from over 9,5000 international participants.
Discussing the ruling, Kristina Littman, the SEC Enforcement Division’s Cyber Unit Chief shed some light on regulators’ thought-process during the trial. She explained that the ruling provides relief to any investors who felt shaded by the company. Additionally, she touched on the overall goal of the new SEC campaign. Littman stated that the SEC must ensure that all issuers of securities, traditional or digital, comply with Federal registration requirements.
The BitClave platform aims to develop a decentralized search ecosystem. Developers seek to create, administer, and market a blockchain-based search platform for targeted consumer advertising. Importantly, BitClave introduces some truly unique features to the market.
For example, BitClave users can decide who gets access to their personal data. Additionally, they receive a payment in the form of tokens for sharing this information. In this manner, users receive welcomed advertisements. Best of all, companies know their advertising efforts only go towards people interested in their products or services.
From the start, BitClave saw immediate success upon entering the market. The firm secured $22 million of its $25 million ICO goal in a mere 32 seconds. Impressively, the platform already had 64,000 registered users. Importantly, these investors received Consumer Activity Tokens (CAT) for their participation.
The company distributed 550,842,000 CAT tokens during the event. The total supply of CAT Tokens is set at 2 billion. Interestingly, developers kept the unissued tokens locked up in a smart contract. These tokens are to release at a later date to hep supplement growth in the platform.
At the time, BitClave’s founder and CEO, Alex Bessonov, called the results “spectacular.” He praised the community for their early support on the project, and he described some of the future releases scheduled on the firm’s roadmap. Now, given the SEC ruling, these promises could see the market.
SEC Racks Up Wins
The ruling follows a string of SEC victories. Just this week, the messaging giant, Telegram withdrew its TON blockchain filing due to pushback from regulators. Specifically, the project hit major snags after a federal judge ruled that the company couldn’t issue GRAM tokens to investors. Telegram appealed the decision and asked for permission to issue tokens to non-US investors. The SEC denied the appeal shortly after its filing.
BitClave – What the Future Holds
Despite the ruling, BitClave appears to be in good faith. The platform issued a statement celebrating the end of the long trial. Now, BitClave is free to pursue its goal to provide internet users with the tools to regain control of their data.
InCore Bank Launches Access to Digital Assets
This week, the Financial Market Supervisory Authority (FINMA) raised eyebrows when regulators authorized InCore Bank to begin blockchain operations. Now, the firm can provide institutional clients with the ability to trade, hold, and transfer digital assets. Additionally, regulators gave the green light to the firm’s tokenization capabilities.
The news represents a major milestone for the EU market. It marks the first Swiss business-to-business bank approved to operate in the sector. Importantly, InCore is an established bank in the region. As such, there is great potential in their strategy to offer major financial institutions and service providers regulated access to blockchain assets.
Speaking on the launch, Mark Dambacher, CEO of InCore Bank described some of the benefits the new platform introduces to the sector. He explained that clients now have the ability to offer users digital assets directly, via the InCore platform. Additionally, he spoke on how this product allows corporations to forgo expensive infrastructure costs associated with the creation of a new blockchain ecosystem.
Dambacher also described the firm’s overall goal to bridge the gap between digital and traditional assets. InCore plans to accomplish this monumental task through the integration of regulated customer protections, safety standards, and an easy to operate interface. In this way, the company can simplify the tokenization process and make it more attainable to clients globally.
InCore now offers a full suite of blockchain-based services. These products cover the gambit from end-to-end business solutions, all the way to integrated e-banking. Since InCore is already in operation in the banking sector, the platform can bring some truly unique features to the market including customized digital asset reporting.
According to company executives, InCore seeks to expand its blockchain strategy in the coming months. The firm already has plans to include brokerage, custody, and transfer services to security tokens. This maneuver is a smart decision as the majority of tokenized assets fall into the security token category at this time.
First Client Secured
InCore’s first-mover approach to the market is already paying off. The firm secured a partnership with Maerki Baumann & Co. AG. Notably, Maerki Baumann & Co. is a subsidiary of InCore’s parent company. Now the firm intends to gain valuable positioning in the Swiss market.
InCore Bank AG
InCore Bank AG is a well-recognized Swedish transaction bank based out of Zurich-Schlieren. The firm entered the market in 2006 with the goal to simplify the banking process and provide clients with a more robust banking solution. Today, the company is known for its in-depth knowledge of applicable regulations and processes.
Its Time to Tokenize
InCore Bank is now ready to celebrate a healthy lead in the market. Tokenization continues to be a hot topic across the EU. As such, Swiss regulators continue to make decisions to keep their country relevant in the digital economy of tomorrow. For now, InCore could be the launching pad for the tokenization of the swiss markets.
GSX Group Tokenizes tribeOS Shares through GRID Platform
First on the Docket
GRID, a product of the GSX Group, is a promising new platform built on the STACS protocol. The team at GSX Group has now announced the first successful tokenization of a company’s shares on the GRID platform – tribeOS.
This tokenization represents the first of its kind on the GRID platform. Beyond tokenizing equity shares in a company, GRID also has the capability to do the same with both, funds and debt, instruments.
Upon announcing the listing of tribeOS tokenized shares, representatives from each company took the time to comment.
Matt Gallant, CEO of tribeOS, stated,
“Using the GRID to create and deploy our shares in digital form allows for a quick and cost-effective route into the digital space. The tribeOS and GSX Group teams share a vision and ethos in promoting the many use cases that blockchain provides and driving greater adoption levels globally. We look forward to working with the GSX to achieve this collective goal…Our ambition is to deliver dynamic cost-saving solutions, broaden the accessibility of capital, and help issuers in terms of speed-to-market. We are working with other companies who intend to use the GRID to enter into the fast-developing world of digital securities. I’d like to thank tribeOS for putting their trust in us and the GRID. This is just the first step on the road to mainstream adoption.”
Nick Cowan, CEO of GSX Group, stated,
“We are excited to have completed the successful digitalization of tribeOS’s shares. tribeOS is the first issuer to utilize our GRID venue, and we look forward to welcoming further pioneering companies who wish to push the boundaries of innovation and accelerate the adoption of blockchain within the capital markets.”
News of the tribeOS listing comes mere weeks after GRID was first launched. At the time of launch, GSX CEO, Nick Cowan, stated,
“We have worked diligently over the past year building a unique service offering with our own technology solution for capital markets. As a venue to create and deploy securities in tokenised form, the GRID will provide the perfect venue for issuers to make the jump into what we call ‘Smart Securities’ as we push to redefine how those securities are traded, settled, and cleared using our bespoke blockchain.”
At the time of launch, we took a look at what GRID is, and the protocol fueling the platform behind the scenes.
While the tokenization discussed is a testament to the viability of what GSX has built, it would not be possible without tribeOS having previously hosted a successful DSO. This event, which was held out of Bermuda, notably saw participation from crypto-giant, Bitmain.
We previously covered this event in a series of articles, looking at the company’s regulatory approval, and details of the offering.
Founded in 2017, tribeOS maintains headquarters in Texas, United States. Above all, tribeOS develops solutions meant to eliminate fraud in advertising.
CEO, Matt Gallant, currently oversees company operations.