Cryptocurrency and blockchain technology have exploded in popularity in recent years. Driven by the market enthusiasm, many blockchain-focused startups were able to raise millions of dollars in capital through initial coin offerings (ICOs), issuing new digital tokens in exchange for more redeemable and valuable cryptocurrencies such as bitcoin and ethereum.
And technologists are advancing tokens as a new way of exchanging economic value of traditional assets such as real-estate, a move that has led to an emerging trend of “asset tokenization”.
Crowdfunding service and Kickstarter-competitor Indiegogo is now expanding its cryptocurrency offering to allow companies to sell new asset-backed digital tokens classed as securities, hosting its first sale of real-estate security tokens on a blockchain for the owners of the St. Regis Aspen Resort in Colorado.
With the help of Indiegogo, owners of the St. Regis Aspen Resort are now issuing cryptocurrencies called “Aspen Coins,” in which tradable digital tokens are assigned as a unit of value for the asset it represents.
Investors will be allowed to purchase the digital tokens with US dollars, bitcoin and ethereum. And token holders will be able to indirectly own an equity stake with no voting rights in Aspen Digital, a real estate investment trust (REIT) that owns the St Regis resort, according to Indiegogo.
Indiegogo is working with a US Securities and Exchange Commission (SEC)-registered crypto brokerage startup Templum Markets to offer the securities tokens to investors. The token sale will only be available to accredited traders, in order to comply with the SEC rules, the company said.
According to information available on Templum’s website, Aspen Digital plans to offer 18 million tokens at an initial valuation of US$1 apiece. If successful, the token sale would boost the property’s valuation from more than US$200 million to about US$224 million, Fortune reports.
In December last year, Indiegogo launched an ICO service alongside its partner MicroVentures, allowing its users to participate in SEC-complaint ICOs. The service includes offering guidance to companies applying to sell their token, with an aim to “keep them on the right side of SEC guidance,” said the company.
Launched in 2008, crowdfunding website Indiegogo claims the projects on its platform have raised US$1.5 billion since the website was founded. It charges a 5 percent fee on all crowdfunding projects, and their payment processors charge an additional fee of between 3 and 5 percent, according to a CNBC report. The company has established an equity investing platform for traders who are interested in investing in shares of startups on Indiegogo’s platform.
While crypto token offering remains a small portion of its overall business, Indiegogo co-founder Slava Rubin told CNBC that the offering coincides with the firm’s vision to “democratize access to capital and bring investment to all kinds of people around America and the world.”
“Having a clear asset like the St. Regis Aspen is the beginning of signaling a shift in how people think about tokenization and investing in blockchains and crypto,” Rubin told Fortune. “Next year I will not be surprised if security tokens become much more normal.”
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