News Flash for the cryptocurrency industry: The SEC isn't coming to save your industry.
Opinion:
The SEC thinks most projects are criminal and since your dealing with criminals, if they steal your money, the SEC probably thinks: What did you expect?
My Research into SEC compliant cryptocurrency projects has led me to a few realizations, and a few conclusions.
Realizations:
- The SEC feels there are adequete regulations on the books for cryptocurrency token project developers to create SEC compliant security tokens, or SEC compliant utility tokens, and conduct business lawfully within the United States.
- There are SEC compliant security token projects and there are SEC compliant utility token projects operating in the United States.
- These projects comply with all known SEC rules and regulations, including KYC (Know Your Customer), AML (Anti-Money Laundering) and qualified investors rules, or exceptions to qualified investor rules.
- This last part is important because it allows non-qualified investors, as in those who have less then one million dollars in assets, to invest in your SEC compliant project.
- These are cryptocurrency token exchanges for these SEC complaint Security Tokens and Utility Tokens, where registered investors buy and sell these Security Tokens and Utility Tokens, in a transparent and compliant manner.
- There are companies in America, Europe and Asia, who are actively involved in creating asset backed security tokens to improve the liquidity of normally illiquid assets. These projects are growing in number.
- See lists at the end for companies and entities operating SEC complaint token projects and exchanges.
Coinbase
- In fact, it is rumored that Coinbase will be opening a Security Token exchange, for Qualified and Registered Investors this year.
Uniswap - Additionally, the biggest decentralized exchange in the world: Uniswap, is said to be developing a security token exchange, with a whitelist of investors, who are probably registered and qualified in some SEC compliant manner.
- Now I realize that non-SEC complaint token communities have good reasons for not being SEC compliant projects, and I am not writing this to debate those points or criticize those projects.
- I am specifically presenting the information which I think will help you understand the SEC's position, or viewpoint, so you can understand why I think the SEC isn't going to change it's rules.
- And so you can better understand the rules of engagement you are currently working under in the crypto industry, and hopefully safeguard your funds.
Conclusions:
- First, the SEC feels there are adequete laws, rules and guidelines on the books for every cryptocurrency project to be SEC complaint as a security token, or utility token, simply by following existing rules, laws and guidelines.
- Second, the SEC feels strongly that these rules and guidelines protect the country of the USA and it's citizens from fraud, money laundering and the loss of investors funds because many non-compliant projects don't follow traditional rules regarding the safekeeping of investors funds.
- Third, it's important to realize that most crypto investors came from traditional investing situations involving banks or licensed, registered stock brokers or securities salesmen. Many investors don't fully grasp the facts regarding the paucity of protections that exist in the cryptocurrency investment world versus traditional investments.
- Fourth, since the SEC considers the sale of unregistered securities a crime, and the SEC feels the unregistered entities selling the unregistered securities are criminials. So, investors purchasing these unregistered securirites, from unregistered entities, are considered to be doing business with criminals. And since these criminials specifically do not follow established SEC mandated rules to safeguard investors funds, I suspect the SEC considers the investors who lose money in this fashion are fools, who dealt with known criminals and lost their money. (My opinion)
- Sorry, that sounded harsh, but I think from the SEC standpoint, projects whose founders are barely known, and they operate their projects in countries with very lax government oversight, so to the SEC they are very suspect from the start. (IMHO)
- And in addition to the SEC viewing these people as wanting to operate beyond the reach of the law. The SEC also views the investors who invest funds outside the US, with these entities, to be taking huge risks and the motives of the investors are also suspect.
- I don't want to be mean to the investors who lost lots of money, but I do want to paint a clear picture of how I think the SEC views this situation.
Last Words
- I think another way to think of this, which may paint a clearer picture for you is to think of the SEC as a crypto scam hunter.
- They advise people not deal with scammers by name. And then you go to the scam hunter to complain about the scammer stealing your money.
The scam hunter feels like you either didn't do your due diligence before investing with the scammer or you did do your due diligence and ignored their advice.
- This non-sec compliant portion of the cryptocurrency industy is suffering, but it is a mess, not of the SEC's making, so they won't be fixing it.
- Therefore the industry needs to fix it.
- Greater transparency in the way of Proof of Reserves is a start, but ultimately the end of centralized exchanges custodying investors funds and transparent sources of investment earnings are both needed.
- Plus more due diligence.
- I don't claim to know how to get there.
- Right now I hope for a form of shared custody to develop, so that investors maintain control of their crypto, but also get a helping hand holding it in wallets that are their own.
- What improvements do you think could be made to safeguard investors funds?
About @shortsegments
Shortsegments is a writer focused on cryptocurrency, the blockchain, non-fungible digital tokens or NFTs, and decentralized finance for over five years.
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SEC Complaint Projects and Exchanges
10 Blockchain Real Estate Companies
Moving on, we’ll introduce you to the top 10 blockchain real estate companies that are bound to revolutionize the industry in the upcoming years.
**1. Republic **
So far, the digital real estate company’s supported over $250 million worth of investment opportunities. It’s worth adding that many companies that work with Republic are backed by well-known “angel investors” and venture capital firms.
2. SafeWire
Second on the list of the top blockchain real estate companies is SafeWire—formerly known as SafeChain, situated in Columbus, OH.
The company is primarily focused on offering a solution to the growing number of wire fraud challenges, which are considered one of the main setbacks for real estate agents, firms, clients, and the industry as a whole. Wire fraud is IT-based fraud practiced by hackers with the intention of intercepting online transactions.
SafeWire attempts to find solutions to protect targeted real estate agents and ensure safe real estate transactions. The platform also works toward authenticating buyers and sellers in the process.
3. Vairt
Another blockchain company situated in Ohio is Vairt.
The company is aimed at real estate investors who are interested in generating a secondary income as a part of the global real estate network. It’s a robust platform that provides a wide range of tools and resources, helping investors maximize their profits and make their plans a reality.
Vairt sources and screens investment properties by using a 100-point screening tool backed by a third-party valuator for confirmation.
What’s crucial to mention here is that, with Vairt, there’s no lock-in period; investors are free to “exit” the property at any given moment. The data-driven, highly analytical approach and long-term support offered by the Ohio-based blockchain real estate company are a definite plus.
4. RealT
The next on the list of major blockchain companies is RealT, located in Boca Raton, FL. The company is actually an international one, allowing investors worldwide to explore and take a chance on investing in the US housing market.
The RealT platform aims to assist investors in buying tokenized property, which allows them to access low-maintenance ownerships and cash flows.
The Florida company is based on real estate tokenization, enabling fractional ownership of assets and a secured blockchain income. It simplifies the entire process—and allows the owners to collect revenue based on token shares.
ManageGo
ManageGo is another NY-based blockchain business that deserves mention here.
The platform essentially leverages blockchain technology for owners of rental properties. To be more specific, ManageGo assists both owners and property managers in overlooking and processing payments, maintenance ticketing, and running credit checks.
So, ManageGo simplifies the process by offering assistance when it comes to checking the renters’ backgrounds. Tenants are required to submit their maintenance tickets online.
The idea behind it is simple. Improving the relationship between tenants and landlords.
In case you’re interested, know there’s also a ManageGo app available for download via Google Play.
RealBlocks
RealBlocks, the sixth on our list of the blockchain companies revolutionizing the real estate industry, is also located in New York.
The NY-based company focuses on connecting investors to the leading alternative investment managers, allowing them to raise capital globally. It will enable investors to buy “fractional interest” instead of the entire portfolio. It automatically reduces fees and speeds up the entire process.
It is essential to mention that the RealBlocks platform, in particular, is considered a pioneer in blockchain networks, given that it launched in 2019. And so far, it’s made quite an impact when it comes to using blockchains in real estate.
SMARTRealty
SMARTRealty, located in Seattle, is seventh on our blockchain real estate companies list.
With SMARTRealty, the investors follow the protocols established by smart contract technology. Allow us to explain:
The platform operates by relying on smart real estate contracts associated with rental agreements and property purchases. If the protocols aren’t met, it automatically leads to termination of the agreement—which adds a layer of security.
Essentially, SMARTRealty is characterized by three major elements—contract platforms that consist of template systems, listing platforms, and the RLTY tokens used for payments.
**Reasi
**We’re down to our eight company—Reasi, based in Santa Monica, CA.
Reasi takes pride in the fact that it’s the first end-to-end transaction platform for real estate. It deals with all elements of selling and purchasing properties.
With the Reasi digital real estate investing platform, you can finish the entire process of making an offer, buying, and then receiving the deed—online.
All the documents are digitally integrated and encrypted, allowing the parties involved more transparency and lower service costs.
Harbor
Located in San Francisco, Harbor is a blockchain real estate compliance platform that specializes in dealing with private securities. And yes, it includes real estate, as well.
Basically, it tokenizes all kinds of assets—funds, real estate, private REITs, and so on—all with the goal of increasing liquidity and transparency.
On a related note, Harbor’s main services include the Digital Subscription Platform, Investor Portal and Dividends, and Marketplace as a Service—all of which can help streamline your alternative investment experience.
The Bee Token
Last but not least, we give you The Bee Token—also located in San Francisco—which takes on a totally different approach to blockchain-powered real estate investments.
The platform’s focus is on decentralizing short-term rentals. In that sense, it’s quite similar to Airbnb; it allows homeowners and investors to rent out their properties. But in the case of The Bee Token, they do so in exchange for cryptocurrency.
So, in essence, it’s a housing-related crypto real estate business.
You’ll be happy to know that The Bee Token’s team includes engineers from Uber, Google, and Facebook—along with a team of advisors from leading financial and tech companies.
Is Blockchain Real Estate Secure?
The final question deals with perhaps the most sensitive issue—security.
Investors will be happy to know that, due to the nature of blockchains, this type of digital real estate investing is 100% legit and secure.
If you’re not convinced about the whole “blockchain and real estate” thing, here are some facts that back up the statement.
If you’re a part of a member-only blockchain, you won’t have to worry about outside sources tampering with your data—since permission for access is required.
The information that has been “recorded” is there to stay—forever. There’s no risk of deleting the data once it’s stored. It will remain in the system permanently.
Hacking is out of the question, as well.
The networks are so well-equipped and protected that even a minor threat to the data stored requires an enormous amount of money and resources—a risk that virtually no one is willing to take.
Related: Is Real Estate Investing Recession Proof?
Final Thoughts
So, we’ve managed to explain the significance of blockchain technology and list the ten major blockchain real estate platforms that are bound to make a huge difference in the real estate industry.
Now, here’s our final take on choosing to take this digital route while researching the housing market 2022.
If you’ve been considering this type of digital real estate trading, you must first understand the essence behind blockchains and how they work. These databases are designed to store all information regarding real estate transactions.
This business is thriving—and the number of companies dealing with real estate through the blockchain is on the rise, too. We’ve listed the ten most popular ones that provide different services to issuers and real estate investors—but the list will keep growing.
It’s crucial to remember that blockchain real estate is secure. Your information is permanently stored—and there is no risk of anyone altering or deleting it.
If you are interested in purchasing an investment property and, at the same time, making use of blockchain networks, you should consider using Mashvisor’s Property Finder. With the Property Finder, you’ll have a chance to explore different profitable markets across the US.
SOURCE
I wrote another article about the SEC, and SEC compliant Security tokens HERE