Embracing Regulation
There has been a lot of talk about security tokens recently. Companies realize that the Initial Coin Offering (ICO) craze may be coming to an end and it is getting more and more difficult to pass off investments offerings as utility tokens. They are, therefore, more and more inclined to bite the bullet and make their investments available as securities under U.S. Securities and Exchange Commission (SEC) regulations.
Crowd sale platform Indiegogo has become the latest company to announce their security token offering, a real estate investment project.
ICOs have mainly been about alternative investments, opening up investment opportunities to a wider audience. Tokens, essentially newly created digital assets on a blockchain, are sold to members of the general public, in order to obtain funding for a start-up’s project.
This has of course been a grey area, as in most jurisdictions, investments in companies equate to some form of equity and are tightly controlled. In the United States and many other places, this means that only accredited investors can make this type of investment legally.
However, there is a big debate whether tokens are securities and, therefore, fall under this type of regulation. Utility tokens are tokens that have a use on the actual platform being designed. For example, in an incentive-based program or as an in-platform currency. The way forward for many companies was, thus, declaring their token a utility token instead of a security token.
More recently, with the ICO market calming down for a number of reasons, including many failed projects and market over-saturation, companies seem to have started taking the approach of working within existing regulations and embracing security tokens offerings as a form of funding.
The Indiegogo Security Offering
Indiegogo has now announced its first tokenized security investment opportunity, the Aspen Digital coin offering, an investment into the prestigious St. Regis Aspen Resort.
The internationally-renowned St. Regis Aspen is a full-service, 179-room luxury hotel with four onsite food and beverage outlets and 29,000 square feet of indoor and outdoor conference and banquet venues with views of the Rocky Mountains.
The funding target for the token offering is $18 million USD. Accredited investors will be able to buy Aspen Coin tokens representing a share of common stock in the real estate investment fund. Investments can be made in USD, Bitcoin, and Ether.
“Security token offerings are the investment tool of the future, a mechanism designed to store wealth by utilizing income-producing digital assets,” said Stephane de Baets, Founder and President of Elevated Returns, the company managing the St. Regis Aspen Resort, “By allowing access to investing in traditional assets like real estate, we are creating a new opportunity for investors to explore an ownership stake in something previously only accessible to private investors and high net worth individuals. Indiegogo is a well-known and trusted name in alternative funding and cryptocurrency, making them an incredible partner for us to leverage their influence, experience and global audience.”
Indiegogo has launched a dedicated landing page for interested members to learn more.
