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$280 Million Real Estate-backed Tokenized Bonds to Be Issued to Investors Worldwide

Tokenized

Fundament, a blockchain firm focused on developing products for the real estate industry, has reportedly obtained approval for issuing a crypto token-backed bond to individual traders and investors. 

The Berlin-headquartered company announced on July 23, 2019 that it was granted permission by Germany’s financial regulator, BaFin, to conduct a €250 million (appr. $280 million) token sale. 

Tokens Offered to Individual Retail Investors Throughout the World

According to details shared by Fundament’s management, the regulated real estate-backed bond will be offered to retail investors located throughout the world. Notably, there’s no minimum investment required to participate in Fundament’s token sale.

For example, investors based in Asian countries such as Singapore or Malaysia may purchase €1,000 worth of Fundament’s tokenized bonds which would represent an actual investment in Germany-based real estate properties.

First Time Approving Blockchain-based Real Estate Bonds

In statements shared with Coindesk, a BaFin spokesperson stated:

“We can confirm that we granted approval for a Fundament Group prospectus. It has indeed been the first time we have approved a prospectus regarding blockchain-based real estate bonds, but not the first time in respect to blockchain technology as such.”

As noted by the Fundament team, the firm will begin marketing its ERC-20 compliant crypto token in August 2019. Commenting on the development of the tokenized bond, Florian Glatz, Co-Founder of Fundament Group, clarified that real estate-backed tokens have been created by several other companies. 

However, tokenized bonds issued previously were introduced through private placements which did not need a prospectus or regulatory clearance.

“The First Mass-Market Tokenized Real Estate for the World”

Elaborating on why his firm decided to obtain regulatory approval, Glatz said: “The reason we went through this long tedious process with regulators was to get rid of any restrictions.” 

In most cases, these types of projects are required to have a minimum investment amount of at least €100,000, Glatz noted. Other restrictions on tokenized offerings may include limiting the number of investors that can participate in the initiative. 

Since Fundament’s tokens do not have to follow these guidelines, Glatz referred to his project as “the first … mass-market tokenized real estate for the world.”

Security Tokens Increasingly Being Launched on Blockchain Platforms

In March 2019, Inveniam Capital Partners released $260 million worth of property-backed tokens via four separate private transactions involving various real estate projects. 

Last year, Templum Markets offered security tokens that represented shares in a Colorado-based ski resort. The tokens were sold in exchange for Bitcoin (BTC), Ether (ETH), and USD.

Apart from the real estate sector, firms like UK-headquartered Nivaura have considered several regulated, tokenized debt and equity shares, which may be sold through secondary markets. 

Backed By Five Different Real Estate Projects

Notably, Fundament’s real estate token will be backed by five different construction projects, three of which are located in Hamburg. One of the projects is based in Frankfurt and one in the University town of Jena. 

After completion, the properties are expected to cover an area of 680,000 square feet, and will consist of various commercial, residential, and hotel properties. 

Explaining how shareholders may earn profits on their investments, Glatz stated:

“[Token investors have] a legal claim of the holder against the issuer of the bond to pay them an annual dividend of around 4-8 percent.” 

“Once the run time of the fund is over and there is an exit, then the token holders get the complete value that was within this fund,” Glatz added.

Fundament’s tokens may be purchased from the firm itself (instead of a bank) for bitcoin, ether, USD, or Euros.

The post $280 Million Real Estate-backed Tokenized Bonds to Be Issued to Investors Worldwide appeared first on Ethereum World News.

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Ontario Securities Watchdog Settles With CoinLaunch, Pending Approval

The Ontario Securities Commission has reached a settlement agreement with CoinLaunch over its alleged failure to register with the Canadian watchdog.

The Ontario Securities Commission (OSC) has reached a settlement agreement with the crypto firm CoinLaunch Corp as of July 22.

According to an announcement by the OSC, there will be a public settlement hearing on July 24 to determine whether the agreement is in the public’s interest.

As per the OSC’s official statement of allegations, CoinLaunch offered a number of crypto-related services, with securities trading among those. More specifically, the statement alleges that CoinLaunch offered to market and promote token offerings, including security tokens, without observing the proper registration requirements with the OSC. 

As such, the firm purportedly violated Ontario securities law. Katrina Gustafson, the senior litigation counsel for the OSC’s enforcement branch wrote:

“CoinLaunch engaged in and held itself out as engaging in the business of trading in securities, without registration under Ontario securities law and where no exemption from the registration requirement was available.”

According to the statement, CoinLaunch provided services to issuers of the BCZERO and ECOREAL tokens. According to the OSC, these tokens qualified as securities in the form of investment contracts.

CoinLaunch also reportedly ran an ERC-20 smart contract platform, which supported the ability for users to create and issue tokens on the Ethereum blockchain. 

According to the statement of allegations, CoinLaunch has filed its intent to dissolve with the Canadian government.

As previously reported by Cointelegraph, the Canadian Securities Regulatory Agency (CSRA) included an entry on crypto assets within its 2019–2022 business roadmap. The CSRA is apparently interested in determining requirements for crypto custodians, as well as how to regulate funding rounds for blockchain-based securities.

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US Elections Regulator Gives Tentative Go-Ahead to Campaign Token

The Federal Election Commission has opened a draft letter to the public, in which they approve of Omar Reyes’ 2020 congressional campaign incentives tokens.

The Federal Election Commission (FEC) has tentatively approved an ERC-20 token issued by Omar Reyes to use in an incentives program for his congressional campaign. The FEC reviewed the coin project in a draft advisory opinion on July 5.

According to the draft letter, the FEC believes Reyes is within his rights to issue his Ethereum-based “Omar2020Token” (OMR) as part of his campaign to join the United States House of Representatives from the 22nd Congressional District of Florida

The FEC argues that because the tokens are essentially souvenirs, with no monetary value, Reyes’ committee is free to issue them as volunteer incentives:

“The Commission concludes that the Committee may distribute OMR Tokens to volunteers and supporters as an incentive to engage in volunteer activities as described in the request because OMR Tokens do not constitute compensation; rather, OMR Tokens are materially indistinguishable from traditional forms of campaign souvenirs and nothing in the Act or Commission regulations prohibits a campaign committee from distributing free campaign souvenirs to volunteers or supporters.”

As noted in the draft, these Ethereum blockchain-based tokens are intended to be used as campaign incentives only. The Omar2020 campaign will reportedly conclude with prizes awarded to the top three OMR holders, but will delete its Ethereum contract and dispose of remaining tokens upon the campaign’s conclusion.

The FEC previously wrote an advisory opinion in 2014 on financing campaigns with the number one cryptocurrency, Bitcoin (BTC). The FEC then said that campaigns could receive BTC as donations, but only as in-kind donations, i.e. as a donation of goods and services and not as money. This means that the BTC cannot be used in transactions directly, but could be converted to fiat money and deposited.

As previously reported by Cointelegraph, Democratic presidential campaigners Eric Swalwell and Andrew Yang have both offered to accept cryptocurrency donations for their campaigns.

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Binance to Switch Tether Addresses from Omni to ERC-20

Binance will switch tether addresses indexed to the Omni network to ERC-20 on July 4.

Major cryptocurrency exchange Binance has announced that it is switching from Omni-based addresses to ERC-20-based addresses in customer wallets for the stablecoin tether (USDT), according to an official announcement on July 3.

In order to make the switch, Binance says that there is a 30-minute downtime planned for USDT withdrawals and deposits on July 4, beginning at 08:00 a.m. (UTC).

The announcement notes that Ethereum’s ERC-20 based addresses will be the standard from now on, and exchange users will not be able to withdraw Omni-based USDT; however, Omni-based USDT can still be deposited by sending tether to old Omni-based USDT addresses on Binance.

The crypto exchange Poloniex also announced support for ERC-20-based USDT deposits on July 3. Poloniex will also offer deposit and withdrawal options for Omni addresses, alongside Ethereum and Tron

According to Poloniex, using Ethereum addresses for withdrawals and deposits is faster and cheaper than relying on the Omni network. 

As previously reported by Cointelegraph, the Huobi added support for ERC-20 USDT addresses in February. Huobi opted to retain support for the original bitcoin (BTC)-based Omni Layer Protocol addresses for USDT.

Huobi’s press release also claimed that Ethereum-based Tether “has a much smoother and faster deposit/withdrawal process.”

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Brazilian Exchanges to Integrate the Real-T, a Stablecoin Pegged to the Real

Cryptocurrency exchanges in Brazil will purportedly be among the first platforms to offer a stablecoin pegged one-to-one with the Brazilian real.

Brazilian cryptocurrency exchanges are rolling out support for a stablecoin, according to a report by Cointelegraph Brasil on June 26.

Brazilian platforms including PagCripto, Nox Trading, 3xBit, and Bitcambio, are reportedly slated to be the next adopters to issue this new stablecoin — pegged one-to-one with the Brazilian real —  Real-T (REALT).

As explained in its whitepaper, the “Real-T Token” is an Ethereum-based ERC-20 stablecoin that is “strictly pegged” to BRL. The paper claims that the company behind the token, Real-T Tecnologia S.A., will publicly share its bank statement to provide evidence for full backing of Real-T in fiat money.

The paper also notes that most stablecoins are currently pegged to the U.S. dollar — including Tether (USDT), Gemini Dollar (GUSD), and USD Coin (USDC) — whereas the Real-T would purportedly be the first stablecoin for the real.

REALT was original launched on the exchange CBX on May 10. According to this announcement, REALT is available for deposit and withdraw, as well as for trade with USDT.

As previously reported by Cointelegraph, the Department of Federal Revenue of Brazil (RFB) has announced new regulatory policies for crypto exchanges, which are to be implemented in September. 

Exchanges are now reportedly required to inform the RFB on user transactions in order to guard against tax fraud. The RFB also specified that exchanges based outside of Brazil must disclose transaction data when its monthly value surpasses $7,750.

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Coinbase Pro Announces Support for Chainlink Token

Coinbase’s professional offering Coinbase Pro is rolling out support for Chainlink tokens.

Major cryptocurrency exchange Coinbase Pro has added support for Chainlink, according to a blog post on June 26.

Coinbase has listed two trading pairs for the token of smart contract platform Chainlink (LINK) on its professional trading platform.

LINK will be available to trade with the U.S. dollar (LINK/USD) and with ether (ETH) (LINK/ETH). The post says that the token will be available in all its covered jurisdictions except for the state of New York

According to the announcement, Coinbase Pro will roll out options for LINK in four steps. The four steps are (1) transfer-only, (2) post-only, (3) limit-only, and (4) full trading. For the first three options, respectively, users can put LINK in their Coinbase Pro accounts, post limit orders, and wait to receive order matches.

The announcement also states that phase updates will be announced via Twitter. At press time, Coinbase Pro has only announced the beginning of the transfer-only phase. 

As per the press release, LINK is an ERC-20 token native to the Chainlink decentralized oracle network. According to Chainlink’s whitepaper, LINK is the token used for payments in Ethereum smart contracts backed on Chainlink:

“In order for a smart contract on networks like Ethereum to use a ChainLink node, they will need to pay their chosen ChainLink Node Operator using LINK tokens, with prices being set by the node operator based on demand for the off-chain resource their ChainLink provides, and the supply of other similar resources.”

The Chainlink network reportedly supports Ethereum smart contracts that rely on inputs from external data sources, APIs, and payment systems. As per the Chainlink website:

“By allowing multiple Chainlinks to evaluate the same data before it becomes a trigger, we eliminate any one point of failure, and maintain the overall value of a smart contract that is highly secure, reliable, and trustworthy.”

As previously reported by Cointelegraph, Coinbase Pro increased its fees and announced a different market structure for the platform in March.

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Future for State-Backed Brazilian Token Issuance Unclear as Bank Sees Leadership Reshuffle

Turmoil over the leadership of the Brazilian Development Bank may pose challenges to cryptocurrency trials.

On June 18, Brazil’s National Bank for Economic and Social Development (BNDES) announced the election of Finance Director José Flavio Ferreira Ramos as its interim president. 

Ramos will serve as the BNDES head until the inauguration of 38-year-old Gustavo Henrique Moreira Montezano, a former economist and the current deputy secretary of privatization and disinvestment. 

Montezano’s appointment followed two meetings on June 17 between Brazilian President Jair Bolsonaro and the country’s minister of the economy and former economic advisor to Bolsonaro’s presidential campaign, Paulo Guedes. The meetings were held in response to the sudden departure of the bank’s now-former president, Joaquim Levy. 

Levy submitted his letter of resignation on June 16 amid perceived tension between himself and President Bolsonaro. 

Montezano closely tied to Bolsonaro government

Montezano embarked on a 17-year career in the finance industry prior to joining the Ministry of Economy. He is a former partner of BTG Pactual and the former chief operating officer at Engelhart Commodities Trading Partners.

Montezano is the son of the economist Roberto Montezano, who worked as a professor at the Instituto Brasileiro de Mercado de Capitais (IBMEC) for more than 30 years. Notably, during his tenure at IBMEC, Roberto Montezano had worked alongside Guedes.

Moreira Montezano has also known both President Bolsnaro and his family personally since childhood, having grown up in the same condominium as the president in Tijuca, Rio.

Tension between Levy and Bolsonaro

Levy’s resignation was prompted by Bolsonaro’s anger with the former president’s appointment of Marcos Barbosa Pinto to the position of director of BNDES Capital Markets — an entity that is responsible for managing a portfolio valued at more than 100 billion Brazilian real (roughly $26 billion). 

Both Levy and Pinto had worked for the BNDES during the governments of Brazil’s former ruling party, the Workers’ Party (PT), which drew ire from the president. Pinto previously served as the chief of staff to Demian Fiocca during Luiz Inácio Lula da Silva’s government, while Levy served as finance minister during the second term of Dilma Rousseff’s presidency.

Brazilian media reported that Bolsonaro stated, “I’m already here with Levy. I told him, ‘Quit this guy on Monday or I’ll fire you without going through Paulo Guedes,’” adding that “suspicious people” could not hold office in his administration. Barbosa Pinto also delivered his letter of resignation on June 16. 

Upon resignation, Levy offered praise to his former BNDES colleagues, commending those “who have collaborated with energy and seriousness to transform the bank, allowing it to respond fully to the new challenges of financing development, meeting the many needs of our population and confirming their vocation and long tradition of excellence and responsibility.” Levy added his thanks to Guedes for his “invitation to serve the country” and wished him “success” in the government’s reforms.

The sudden resignations drew the criticism of the president of the Chamber of Deputies of Brazil, Rodrigo Maia. Maia described the government as coming to comprise a “crisis plant,” adding:

“This lawyer who was dismissed from the BNDES is one of the most understood cadres of social policy in Brazil. It is a shame that Brazil lost two quality paintings of Joaquim Levy and Marcos Pinto in the way they were removed.”

BNDES to finance documentary using crypto

On June 3, Brazilian publication State of Sao Paulo reported that film producer Elo Company had participated in a proof of concept for the BNDESToken initiative. Elo Company is known for its involvement in the production of Alê Abreu’s Oscar-nominated “Boy and the World.”

BNDESToken is slated to comprise an ether-based stablecoin backed by the Brazilian real that the BNDES plans to use to finance the production of a documentary produced alongside Elo Company. 

The project will see the development bank issue the tokens to fund purchases necessitated by the film, with the BNDES also facilitating the exchange of said tokens for fiat currency. The token will not be promoted and can only be issued or exchanged by the bank. The BNDES has been developing its cryptocurrency since 2018. Gladstone Arantes Jr., an IT manager who is working on the token’s development, recently stated:

“Instead of releasing the money to the client, the proposal is that we will release the token that can be used for all purchases provided for in the financing agreement.”

Vanessa da Rocha Santos Almeida, another developer working on BNDESToken, has described the project as allowing “society to look at the transactions” made by the national development bank.

BNDES trials token issuance

The proof of concept saw Elo Company simulate the payment of four screenwriters, with Brazil’s National Cinema Agency (ANCINE) also participating in the project. 

Sabrina Nudeliman, the president of Elo Company, stated that “when the accounts are questioned and more transparency is requested, the blockchain responds to this demand.” Nudeliman added, “With the blockchain platform, my vendor provides real-time accountability.” 

Daniel Tonacci, an adviser to the board of ANCINE, also emphasized the efficiency savings made possible through the adoption of distributed ledger technology, stating:

“It’s the Waze of public money, where we can track where it goes, where it fits, how fast it is.”

Brazilian institutions explore blockchain

On May 30, BNDES systems analyst Fabiano Mattos published an opinion piece praising the BNDES’ adoption of distributed ledger technology (DLT). Matto emphasized the security and transparency benefits of digital currencies, asserting that “blockchain would be the ideal solution to support BNDES disbursement.” He continued:

 “This system would allow the whole operational track to be followed — including the financial details — from disbursement of the financing, to the client’s suppliers and other counterparties. Finally, those suppliers could exchange the token for fiat currency at BNDES. It is thus publicly and irrefutably possible for a citizen, and society as a whole, to monitor the disbursements of public money made by the BNDES — and also to see the impact of this action on the various actors of the Brazilian economy. BNDESToken would vastly improve the way we can measure effectiveness of BNDES funding.”

Mattos also noted that a number of Brazilian institutions are actively collaborating to explore potential applications for DLT, including the Institute of Technology and Society and the Government Blockchain Association. The BNDES analyst indicated that the management of land registries, intellectual property rights and centralized identity are among the governance processes for which blockchain technology is being explored.

Brazil reconsiders regulations

The increasing penetration of cryptocurrency into Brazilian society has prompted moves to develop a clear regulatory apparatus governing the country’s crypto sectors.

On May 30, Maia requested that a special commission be created to consider the current legislative framework pertaining to digital currencies in Brazil. Several weeks beforehand, the Brazilian Internal Revenue Service also published new tax guidance mandating that cryptocurrency transactions valued in excess of BRL$30,000 (approximately $7,600) be reported each month.

In March, the BNDES chose five blockchain startups to participate in its BNDES Garagem incubator program alongside 74 other emerging companies.

Related: As Brazil’s Economy Risks Recession, Regulators and Banks Implement Blockchain