Investors Can Now Register For Tokenized Harbor Shares In New Apartment Block
A new security token compliance platform is making it possible to use cryptocurrency as equity in real estate. The platform, blockchain startup Harbor, has officially launched already, and is working on allowing users to purchase digital shares in a high-rise building called The Hub at Columbia.
The option to invest was presented to attendees of the CoinDesk’s Consensus: Invest event, and there are 955 shares available, equating to 955 tokens. Each of the tokens are worth $21,000 to invest in the property, which is presently owned by Convexity Properties, the real estate sector of DRW Holdings.
About $28 million has been raised by the company already this year, which can at least partially be due to their development of ERC-20 tokens. Their development projects help to benefit other companies that want to work on their own equity through token offerings.
CEO of Harbor, Josh Stein, spoke to CoinDesk about their intention to track security token trading and the true identity of the investors that participate. This effort will be to ensure that each sale is “compliant every time, everywhere.”
The offerings for the Harbor platform don’t appear to be any different from a typical private placement sale. However, the main difference appears to be the way that the blockchain is used, introducing companies to a bigger audience.
Often, this type of offering could involve just 10 to 20 investors, but this platform can involve anywhere from 100 to 2,000 investors. The $21,000 minimum stake is still significantly smaller than what investors usually have to contribute in such a scenario. The regulatory limit of this many investors goes along with the requirement that a higher quantity of investors to be released to the public.
When someone decides to get involved with the investment opportunity, they start by signing up on the website. Their sign-up includes the completion of a know-your-customer (KYC), along with their driver’s license and proof of their financial information. On the process, Stein noted,
“The KYC happens in just a couple of minutes. The accreditation, verification of assets and income, takes … 1–3 days for an individual and 2–12 days for an entity and the reason why is you have to peel back the layers and verify accreditation for individuals in the entity.”
After approval, the tokens go through an electronic purchase with the signing of the electronic document. A “Big Four’ accounting firm is assigned to watch the payments, while a security firm audits the smart contract on file.
Investors have the option of using Bitcoin or Ethereum in the token purchase as well, though the same is not true of other private sales. The crypto often doesn’t need to be converted unless absolutely necessary, but Harbor is using BitGo services for custody services. Anyone that wants to trade or sell their shares will need to wait 90 days to do so, which is another way that the company’s protocols differ from traditional sales in this sector.