The owners of the St. Regis Aspen Resort in Colorado first to sell real estate security tokens on a blockchain with help from Indiegogo.
Crowdfunding Site Introduces New Service
Indiegogo, one of the largest global fundraising websites, is looking to expand its cryptocurrency offering by allowing companies to sell new asset-backed digital tokens. The tokens are classified as securities, and will be issued by a real estate investment trust (REIT) called Aspen Digital.
According to CNBC, Indiegogo’s leap into cryptocurrency comes after the company’s push into the initial coin offering (ICO) market in December 2017.
However, after the Securities and Exchange Commission began cracking down on the emerging industry, the company decided not to hold a public sale.
The luxurious St. Regis Aspen Resort is one of the first major real estate properties in the U.S. to test out tokenization after its owner abruptly scuttled an investment trust IPO it had planned for February.
The hotel owners attributed their sudden shift to the world of blockchain to the technology’s potential.
“We think we have a once-in-a-lifetime opportunity to create a benchmark for what real estate tokenization looks like,” said Stephane De Baets, founder, and president of Elevated Returns, owner of the St. Regis.
De Baets told Fortune that he was interested in pursuing tokenization so that he might “bring liquidity to the real estate sector.”
In order to conduct the sale, the owner of the Aspen St. Regis created a single-asset real estate investment trust or REIT. The trust, called Aspen Digital is going to sell tokenized equity in the form of Aspen Digital Tokens.
The tokens, dubbed as the Aspen Coins, are not registered with the SEC and represent common stock with no voting rights. The tokens are tied to Ethereum, the second-most valuable cryptocurrency network next to Bitcoin.
Hoping for a Positive Market Reaction
According to Fortune, De Baets has plans to continue tokenizing properties in his portfolio if the Aspen Coin does well.
“We’ve lined up a substantial pipeline of global properties to bring to market subsequent to the first offering,” he said, mentioning hotels in Singapore, Hong Kong, Thailand, and around Washington, D.C., as the next in line to be tokenized.
Slava Rubin, Indiegogo’s founder and chief business officer, told CNBC that despite the setbacks, blockchain and cryptocurrencies have become a key source of fundraising and that the company is “hoping to see continued growth if this is what the market demands.”
“We have been working on our blockchain offering for a while now,” Rubin said in a phone interview. “It really goes back to our original vision where we wanted to democratize access to capital and bring investment all kinds of people around America and the world.”