The tokenization of a small share of the St Regis Aspen is a harbinger of things to come
BREAKERMAG
November 8, 2018
By Robert Stowe England
The St. Regis Aspen hotel boasts 179 rooms, a 15,000 square foot luxury spa, and terrific views of the Rocky Mountains on all sides. It’s a prestige venue by any measure, and apparently an attractive investment as well. Recently, a New York real estate asset management group Elevated Returns closed an $18 million digital token offering for a small share of the property. The firm chose Templum Markets as the sole placement agent for the offering, working with investors recruited through Indiegogo, a platform that usually funds projects like this fitness robot for pets.
The ICO gold rush has been dominated by utility tokens marketed as advance purchases of services and products from the sponsoring business. These sales were often labeled to avoid being treated as securities and thus regulated by the SEC (though the SEC is seeing through the spin and cracking down anyway). By contrast, security tokens are sold as equity or debt securities, and sometimes as rights to share in future profits or revenues. They are issued in compliance with securities laws and are more like traditional stocks. Compliant platforms have to satisfy know-your-customer and anti-money laundering rules. Issuers need to know whether buyers are qualified investors and may limit the number of investors involved.
Evangelists for security tokens believe they will open up financing for illiquid assets, from luxury hotels to fine art. Eventually, they imagine democratizing finance and brokering an open network for peer-to-peer securities trading across the globe. “If you can create the financial infrastructure anyone can access through the internet, it is a massive equalizing force for the world,” says Will Warren, co-founder and CEO of 0x, a protocol for trading tokens on the Ethereum blockchain.
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