Security Token Academy encourages you to read our
Security Token Insight: STO Spotlight featuring Estatoken & La Estancia Holdings

Expert Interview


 
Laurent Chemla, Co-Founder, Estatoken

Laurent Chemla

Laurent is a serial entrepreneur with more than 22 years of experience building and managing successful companies. Laurent also co-leads the Rights Blockchain, a non-for-profit Blockchain initiative that provides a source infrastructure enabling a universal rights registry for the TV & Film industry.

Laurent has also been a speaker at MIPCOM, the Security Token Academy, the TV of Tomorrow, Online Advertising & Jupiter events and at the Cannes Cyber Lions.

LinkedIn    |    Twitter    |    Company

Transcript


 

Amy Wan:

Welcome to Security Token Insight, brought to you by the Security Token Academy.

The security token industry is here and will provide a key foundation for the evolving financial internet. The Security Token Academy provides insights about this new era for security token enthusiasts, investors, and issuers. The security token industry is here, and you can get involved.

Hi, I’m Amy Wan. Adam Chapnick is on assignment in London. Coming up on today’s episode of Security Token Insight in your security token news: the securities and exchange commission comes after Kik. Our STO spotlight focuses on Estatoken and La Estancia Holdings. Learn about their real estate backed STO in the Caribbean. We’ll also sit down with the co-founder and CEO of Securrency to get an update on the company’s compliance aware tokens. Plus, details on Security Token Academy’s meetup tomorrow in London. That and more is coming up on this episode of Security Token Insight.

Now it’s time for your security token investing news. We begin with the securities and exchange commission’s lawsuit against messaging app Kik. The SEC has sued Kik for its 2017 ICO. The SEC has kicked a legally raised $100 million through its digital token sale. The SEC says Kik sold its token without the proper disclosures and did not register with the SEC. Kik is now seeking to raise money on a crowdfunding site to fight back against the SEC.

Mason Borda, the CEO of TokenSoft, wrote an article on medium detailing exactly what Kik did wrong. To view it, go to his medium page at the address on the bottom of your screen. By the way, TokenSoft is a gold corporate member of the Security Token Academy.

To learn more go to our website securitytokenacademy.com and click on the directory tab and the corporate member home page.

Now, for this week’s STO spotlight, Estatoken and La Estancia Holdings is in our STO spotlight. Their token represents an equity ownership stake in La Estancia Holdings, which includes 18 income producing luxury residential real estate properties in the Dominican Republic.

Before we meet the co-founder of Estatoken, let’s learn a little bit more about the STO. Let’s take a look.

As I mentioned earlier in the show, Adam Chapnick is on assignment in London for tomorrow’s meetup. More on that coming up, but before he left, he spoke with Laurent Chemla, the co-founder of Estatoken and chief tokenizer officer at La Estancia Holdings to learn more about their STO.

Adam Chapnick:

Today, we’re going to be talking to Laurent Chemla, the co-founder of Estatoken and chief tokenizer officer at La Estancia Holdings. Laurent joins us now from Miami, Florida. Welcome Laurent.

Laurent Chemla:

Thank you Adam.

Adam Chapnick:

First, let’s hear a little bit about Estatoken and La Estancia Holdings. What can you tell us?

Laurent Chemla:

Sure. Estatoken is a digital marketing firm that is focused on real estate back to digital securities offerings. We help issuers of digital assets, vertical assets that are backed by a real estate being marketed on the more efficient manner to investors worldwide. But our vision as the market grows is really to look at a more programmatic bind platform that was mimic what digital ads are doing for the traditional world in a compliant manner for digital securities.

Yeah? Sorry.

Adam Chapnick:

No, no, please. Go on.

Laurent Chemla:

No, I was going to say that La Estancia is actually one of our clients, and they control a large portfolio of assets that are located in the Dominican Republic. These are trophy properties, and they are in a resort called La Estancia Golf Resort.

Adam Chapnick:

Compelling. Okay, so tell us about this STO that you’re describing. When was that going to begin? Who can invest? How much money are you trying to raise?

Laurent Chemla:

Sure. In fact, it already begun. It was launched on May 15th, and for the next 60 days it’s where it duringthe private sale we’re focused exclusively on institutional investors, finding the offices, high net worth individuals that are qualified and located in the specific jurisdictions that we’re targeting, which are in fact most jurisdictions worldwide, most of Western Europe, Asia, and South America, and of course the United States.

The second part of the sale, which will begin on July 1st, will be focusing on retail individuals that can invest a minimum of $10,000. We’re trying to raise just shy of $10 million for the first offering.

Adam Chapnick:

Got it. So you’re engaging in something that’s got a lot of interesting facets to it. So, can you share what are some of the benefits that you guys have figured out for investors in this case?

Laurent Chemla:

Sure, yes. There are really two types of benefits. The first one are financial benefits. Obviously, whichever way you look at this, and it’s exceptional investment from a real estate perspective. We’re guaranteeing an 8% annual yield paid out to investors on a monthly basis as dividends, but also a 75% profit share in the event of the liquidation, the sale of one of the assets. So a portion, the totality of the assets, and when you take and you factor that into account, this translates into a targeted cash return that can be above 30% at your file. It’s a very interesting, obviously investment from that perspective.

The second kind of benefit is that investing in the Dominican Republic, a minimum of $200,000 or more really allows the investor to qualify for residency status, which can in turn allow them to get a passport within two years in the Dominican Republic. So it’s quite interesting for some retail investors worldwide that are looking to get a second citizenship in a foreign country.

Adam Chapnick:

Yeah, that’s quite unique I think, and it opens up the possibility of a lot of different motivations for getting involved beyond just the value inherently in the property. But, can you explain some of the trophy assets that you describe that are under the, it’s a long-term commercial lease? Is that right?

Laurent Chemla:

Yeah, exactly, and that’s what makes this opportunity so unique, because they are residential luxury properties, but they are under a long-term commercial lease agreement with one of the Europe’s largest media production company. Those properties range from seven bedroom villas that are very luxurious with their own pool and jacuzzi, to a four bedroom townhouse, to a golf cottages that are very charming, and brand new one to two bedroom apartment units that are right on the golf course as well. Really, when you look at it, it’s a broad collection of a portfolio that’s been really carefully curated to optimize return for investors, and also to ensure that there is a diversified risk exposure when you compare this to more residential leasing or tourist and rental properties.

Adam Chapnick:

Well, what made you guys decide to do an STO for this in the first place?

Laurent Chemla:

Well, we were looking at different ways to really capitalize on blockchain technology as it applies to real estates, which is the, as you know, the largest asset class. It turns out to be that the tools that are really available in today’s world are fairly antiquated. I’m thinking specifically about reads for example, or real estate farms, that they back several decades now, and they are really the latest innovation of when it comes to investment in real estate. What blockchain technology really allows us to do is to really sectionalize those assets and make sure that we can provide this in a very efficient and transparent manner with also a greater liquidity on the backend eventually for international investors.

Adam Chapnick:

You hit on sort of what people say are the key benefits of security tokens in real estate. Can you elaborate a little bit on why they’re more efficient, and then how that liquidity happens for people who maybe aren’t clear?

Laurent Chemla:

Yeah, sure. The fact that really security tokens are representation of the digital assets on the backend in the form of a digital wrapper that really is backed by shares of the properties and is really a more efficient manner to trade those tokens on peer to peer basis, and eventually on secondary markets when volume will peak up, which is not the case yet. We have to be honest with everyone. You will see a great upside for investors, because you’ll be able to trade those tokens in a 24/7, 365 basis on the worldwide level, which is not the case even for reads that are publicly traded.

So, it’s a great benefit. It ensures security, transparency, and down the road a greater pull of liquidity for investors.

Adam Chapnick:

That makes a ton of sense. Can you talk about whether this blockchain revolution is filtering into the real estate industry or at large? How is it impacting the real estate industry?

Laurent Chemla:

I think it has a tremendous impact on the industry because, as I said earlier, it’s a fairly centralized industry where there’s a lot of middle man involved in the process of selling assets and buying assets. You know, I’m thinking specifically about real estate brokers, but also title companies, real estate attorneys that I involve. Obviously this creates a fairly inefficient process where there’s a lot of cost structural, so that gets sucked in into the equation. At the end of the day, it’s passed on to the investors.

The benefits of sort of disrupting this with the new technology, such as blockchain, and leveraging, and distributive ledgers allow this to really automate a lot of this process. Ensures that there’s greater transparency for the investors, but also that the issuers can maintain a better oversight on their offerings.

Adam Chapnick:

What are some of the companies that you guys worked with to put this together. We love hearing about the process. Can you share some of that?

Laurent Chemla:

Yes. We are proud partners actually of Securitize. They helped us on the turn key basis into it from a tokenization aspect of things, and ensuring that we remain compliant throughout that process. So, it was very important for us to make sure that we would stay compliant, because obviously, we’re dealing with securities here. So there’s a lot of legal requirements that I already touched to them. Also from the investor’s perspective, their platform provides a dashboard to investors that allow them to track their investments in almost real time, and also dividends that get paid out to them. Basically, it’s a light cycle management solution. So, Securitize has been a great partner for us so far.

The second partner that we’ve worked with is Paxos, and Paxos is really an institution grade custodian. That really gives us great flexibility from an investment perspective, knowing that we will be able to receive investments, whether they’re in crypto or fiat. But also if it’s in crypto, minimize the exposure of volatility by having liquidation done within a 24 hour process and ensuring also that the Paxos is connected and well-integrated with the Securitize platform made it so much more seamless for us to manage.

Adam Chapnick:

Did you find that having a custodian that’s flexible and plugged in in the way that you described is understandable to investors as a benefit to them?

Laurent Chemla:

Yeah, I think it’s extremely important. In fact, I think the industry still lacks of, you see a Wall Street great type of custodians. I mean, we know that there are a lot of discussions going on right now, and some test from Fidelity and others, and that’s really what’s going to help unlock the true investment potential on the market. There’s no doubt about that, because a lot of the sovereign farms, a lot of the larger investors, hatch phone, et cetera, won’t even look at deals no matter how great they are. A great deal like ours will fold below the radar, unless there’s really a great level of custody behind.

So yes. I mean, we’re obviously at the beginning of that, but it’s getting there. I think we’re hopeful that in a couple of months, if you will see one of those great institutional great type of custodian emerge.

Adam Chapnick:

Yeah. So, in the real estate space, with respect to blockchain, we’ve seen a focus undoubtedly on what people call the “trophy properties”. From what you described, this definitely counts. What do you think it is that makes it so appealing to investors? Can you figure that out?

Laurent Chemla:

Yeah, of course. Well, there’s several, in our situation, there are really three criteria that makes this opportunity so appealing to investors. Number one, if you look at it from a macro level perspective, the Dominican Republic is a very stable country, both from a political and economic standpoint. In fact, according to a recent United Nations report, the foreign investments in 2017 was an excessive 3.5 billion. It ranks so high that it’s compared to even Latin American countries. So, it’s really a strong economy, a stable country, and that’s very important I think for investors to know what they’re getting into.

Second one, obviously La Estancia Resort is a beautiful resort. I touched upon earlier, on some of the benefits of the properties there. It’s very well located in the most favorable part of the island. I don’t know if you’ve ever been to the Dominican Republic, but it’s on the south eastern part of the island, very-

Adam Chapnick:

No, you haven’t invited me yet.

Laurent Chemla:

Oh, well, I mean, you’re our next guest. So whenever you want, it’s there.

Adam Chapnick:

Next time.

Laurent Chemla:

As soon as you want, and with our pleasure. But you know, it’s right next to some of the most beautiful beaches around the world. You’ll see also located in terms of our resort, next to Casa de Campo, which is a world renown resort that has attracted historically some of the wealthiest families. To name a few, Julio Iglesias, Óscar de la Renta, they own properties there. So, we know this is a real true validation for the international demand in the area.

Lastly, I think what’s very important is obviously the golf course, which is a center piece there. It has been designed by Pete Dye. Pete Dye is a recipient of a lifetime achievement, PGA Achievement Award, and this golf course is just absolutely exceptional. It’s an 18-hole golf course, five star, and I think it’s a very attractive value proposition for investors that reside there.

Adam Chapnick:

So you’re checking a lot of boxes. How about for the future? The final question, tell us about any goals that Estancia Holdings has you that you’re ready to share.

Laurent Chemla:

We are the very, very ambitious goals. I mean, this is just the beginning for us. If you will, we look at it from a proof of concept perspective. It’s a small offering. Quote, unquote, it’s only 10 million. We have about $75 million in a pipeline ready to go right after that. It will be in two separate time sheets. The second one coming up is really additional portfolio of 120 units. Again, under the same kind of a long-term commercial lease, but will allow us to provide an even increasing return, close to probably even 10% annual yield. Very soon after that, probably at the end of Q4 of this year, or Q1 of next year, we will be developing a 240-room hotel property that will be operated by one of the largest hotel chains in the world.

So, and that again will yield in even higher return. We’ve structured those offerings so that token investors in phase one will be incentivized to get in on phase two at a discounted opportunity rate. Then, it’s the same thing for phase three.

We’re very ghoulish. This is just La Estancia and just the Dominican Republic, but we also have through our partner and client single corp., who’s the designer behind those properties, opportunities in the United States that will be coming up, naming the commercial buildings in the Baltimore region. So it’s only the beginning, as I said. We’re very confident that the market is there and that it will be increasing soon.

Adam Chapnick:

Today the Caribbean, tomorrow the world.

Laurent Chemla:

Tomorrow the world, absolutely. Let’s concur.

Adam Chapnick:

That was Laurent Chemla, founder of Estatoken, and the chief tokenizer officer of La Estancia Holdings. Thanks so much for chatting with me today. We wish you and the entire team the best of luck with your STO.

Laurent Chemla:

Thank you Adam. Always a pleasure to speak to you.

Adam Chapnick:

You can learn more at estatetoken.com.

Amy Wan:

The Security Token Academy is honored to host its first London meetup in partnership with Fincross International. Our own Adam Chapnick will be there as well. The event takes place at the illustrious 12 Hay Hill Club, and is currently at capacity. The evening will feature networking, insightful discussion, food and drinks. We’ll have more on the London meetup in future episodes of Security Token Insight.

I want to remind our viewers that if you have any questions about security tokens, be sure to email us and we could answer them right here on a future episode of Security Token Insight. The address is [email protected] Be sure to include your name with your question. One more time, the address is [email protected]

The Security Token Academy attended Crypto Invest Summit in Downtown Los Angeles last month. The event attracts security token and crypto enthusiast from around the world. The Security Token Academy team was there interviewing some of the biggest names in the security token industry. Adam also spoke with the co-founder and CEO of Securrency. Securrency is a platform allowing issuers to construct offerings, define terms, KYC AML potential investors, and tokenize securities. In this expert interview, Dan Doney discusses the importance of interoperability, and has an update on the company’s compliance aware tokens.

Adam Chapnick:

We are here in Los Angeles for CIS 2019, and we are joined by returning champion, and friend of the show, and gold corporate member of Security Token Academy, CEO of Securrency, Dan Doney. Thanks for being with us.

Dan Doney:

You bet Adam, anytime.

Adam Chapnick:

All right, so we have talked frequently over the past year, but for those who haven’t yet heard of Securrency, despite all of your myriad accomplishments, what is Securrency and what do you do?

Dan Doney:

We provide blockchain-based financial services infrastructure to banks and investment banks. So we make it easy for existing financial institutions to get involved in the blockchain space, and at the same time we make it easy for issuers who are bringing new offers to market to come and take advantage of the security token economy.

Adam Chapnick:

Exactly, and you have a few sort of special sauce items that you sprinkle in there that set you apart from others who do similar things. Can you just sort of take off a couple of those?

Dan Doney:

Yeah. We center in compliance. So, that’s the key piece. We’re going to go into a little bit in terms of progress updates on our compliance who wear tokens. So we’ll dig into that, but the bottom line, the mean secret sauce is we produce shares, securities that actually have the rules built into them. They’re smart shares. They know what they’re allowed to do. So they will only allow themselves to participate in transactions between known and qualified parties.

This is a game changer. This isn’t like your grandma’s shares. These are shares that are actually able to transact internationally, and that’s a big deal, to get liquidity.

So we’re excited about that. We’re going to give you some progress updates there and a number of other important integrations and offerings that we’re bringing to the market.

Adam Chapnick:

Fantastic. Okay, so now that everybody gets what you are and why you are important, give us a little taste of what you’ve been up to in the last six months. I’m sure you’re not doing much.

Dan Doney:

Well, the last six months have been pretty busy. So, we’ve rolled out some interesting and important technical capabilities, support for tranches, which is important for companies going through series A, series B, different voting rights, or issuing shares in the US and overseas, Reg D, Reg S. So that’s an important piece. We have interest-

Adam Chapnick:

Sorry to interrupt, but so when you talk about tranches does that mean that the smart token itself has some trigger built in to understand when a milestone is met or something like that?

Dan Doney:

So, that’s a piece of the way that you do tranches. Another, more importantly, most importantly, not all shares are equal inside of a company. So some have different rights, some have different handling, etc. So you’re able to have a single company shares, but with different rules built into them based on the rights of the actual shareholders.

Adam Chapnick:

Got it. Amazing.

Dan Doney:

Yep.

Adam Chapnick:

That’s so great.

Dan Doney:

So that’s a cool piece. We’ve supported non-fungible tokens now, so we can do not just shares of things, but whole title ownership of things. This is opening up the possibility to do all sorts of new financial instruments as a baseline. Funds are just really combinations of both of those. So there can be shares in funds, and then funds themselves have assets, which can include rights in other funds. So you can build in those behaviors in a generic way.

There’s a bunch of things from a baseline set of financial transactions that we’ve built in.

Adam Chapnick:

Wow.

Dan Doney:

We’ve done a number of important integrations. So, integrations with Paxos for example, with BitGo for custody solutions. Paxos, we’re real excited about because of their ability to do publicly traded shares. So, that’s opening up new possibilities to trade, for example, shares of Apple or IBM in crypto networks.

We’ve got an integration through Cascade FinTech that allows us to do credit card transactions. We believe the source of liquidity is convenience. So, the extent that you could make this everyday usable in the constant payment channels, so the folks don’t even need to know that they’re working in the crypto space is where the widespread option really comes from.

We’ve got some great relationships with partners. So you know Vertalo?

Adam Chapnick:

Yes.

Dan Doney:

A great working relationship there. We’re supporting the Inventium launch, the big security token launch there, a crowdfunding launch for Endeco.

Adam Chapnick:

So, sorry to-

Dan Doney:

So, big and little token offerings.

Adam Chapnick:

Yeah, so Inventium, that’s the real estate of a couple hundred million. Is that right?

Dan Doney:

260 million.

Adam Chapnick:

$260 million across a few cities, right?

Dan Doney:

That’s right. So there’s several offerings built into that one core opt.

Adam Chapnick:

Interesting, and then what was the second one that you mentioned? I’m sorry.

Dan Doney:

Endeco.

Adam Chapnick:

Okay, what’s that one?

Dan Doney:

They are a crowdfunding offering.

Adam Chapnick:

Oh, okay.

Dan Doney:

So you’re showing that this works at the very biggest scale, the biggest security token offering ever, and then we’re also showing that this works at small scale. Even at the hundred thousand dollar level, it’s so efficient that we’re able to do even tiny security token offers.

Adam Chapnick:

It’s a little bit off the subject maybe but, and then does that mean that your price structure is even workable for someone who’s only raising a hundred grand or something?

Dan Doney:

Because we’ve automated so much of this process, we’ve driven down the cost of actually bringing out a token offering to the point where it’s the kind of thing that can be done for everyday offerings, for $100,000 offerings, for $500,000 offerings.

Adam Chapnick:

That’s a big deal. Wow. Congratulations on that too.

Dan Doney:

It’s big for municipal bond offerings where, often times when small governments are doing offerings to fund their projects, they spend a lot of their money on the actual offering itself. So, they’re raising $2 million, enough to spend $250,000.

Adam Chapnick:

Your head, that’s a shame.

Dan Doney:

I set them off the bottom line.

Adam Chapnick:

Yeah, and it hurts.

Dan Doney:

By driving that cost down, we can do more public good as well.

Adam Chapnick:

Fantastic. Okay. Any other interesting things you’ve been up to?

Dan Doney:

Yeah, no. There’s two babies. I want to emphasize these two components.

Adam Chapnick:

Okay.

Dan Doney:

The first one is, again, as we come back to these compliance aware tokens, the centerpiece of this is the ability to map global security’s regulations into the behavior of the tokens.

Adam Chapnick:

Yes.

Dan Doney:

Global security’s regulations are complex. Each jurisdiction has their own particular rules.

Adam Chapnick:

Sure.

Dan Doney:

So, you can map these in to the tokens. They can change, and the tokens can adapt to the new rules that’s important. We’re working with the regulators from two governments to actually show that we can issue private securities with the jurisdictional rules of each of those governments and trade them between the citizens of those two countries. This is showing cross-border trading, decentralized cross-border trading of restricted securities.

Adam Chapnick:

Wow.

Dan Doney:

That is a really big deal, because in the end it’s possible to layer in all the world’s frameworks into these same tokens and allow cross-border trading. Currently, only the very biggest financial institutions are capable of these types of trades, because they’re so complex. This brings it to everybody, and allows for global liquidity.

Adam Chapnick:

Incredible.

Dan Doney:

Working directly with the regulators is very exciting, because they can actually provide their input and oversight into this. So we know that we have something that they-

Adam Chapnick:

Approve.

Dan Doney:

That’s workable.

Adam Chapnick:

Yeah, yeah. Amazing.

Dan Doney:

So that’s big, and then maybe even bigger.

Adam Chapnick:

Yeah, there’s another one?

Dan Doney:

Yeah, yeah, yeah.

Adam Chapnick:

This is six months. My God. What are you guys doing? Incredible.

Dan Doney:

That’s coming. What we’re really starting to focus on now, we’re calling it “the operating system for finance”, or the inter-operating system for finance.

Adam Chapnick:

Okay, I like it.

Dan Doney:

So, if that being then all of the various token standards that are out there, we’re agnostic in this. We have our own compliance aware framework. These are just add-ons that you can add onto, for example, Polymath’s token, securitized tokens, et cetera so that when an issue or issues, they’re able to use any one of those interfaces to interact with their tokens. So it’s sort of the framework that allows you to issue tokens once and interact with them through any one of those channels.

Adam Chapnick:

Wow.

Dan Doney:

The desire, again, is full inter-operability.

Adam Chapnick:

Yeah.

Dan Doney:

From that, then we can layer in more and more financial instruments at their base level, so lending. We have a lending platform now doing full securitized lending, again, on the same basic framework becomes very possible.

Adam Chapnick:

Yeah.

Dan Doney:

We call it “the operating system of finance” because in the same way that an operating system, yeah, takes and abstracts away the principles of how you do storage, how you interact with the monitor, et cetera, freeing up the software to interact with all of the other pieces. This is designed to do the same basic thing for finance so that it doesn’t matter which ledger you happen to be using. There’s some great new ledgers coming along with Algoran. We’re real excited about Algoran. As you know, we also like Hedera and the direction that they’re going.

So, you’ll be able to use these same baseline tools across these ledgers as they continue to evolve and improve.

Adam Chapnick:

Amazing. Yeah. That’s a component of the liquidity promise as well. I think, wow. Okay, so anything else before we-

Dan Doney:

No. I’m good. No.

Adam Chapnick:

A couple more things?

Dan Doney:

You bring your good questions.

Adam Chapnick:

Wow. No, that’s amazing. So, given that you are sort of up-leveling the whole sort of menu of what’s possible for issuers and investors, how far ahead of everybody are you? There’s two possibilities, right? You’re developing and seeing around the bend and nobody sees it yet, or are you bringing it all down to where everybody can use it? Which do you think?

Dan Doney:

Well, so that is another important addition. We have open-sourced the compliance to our framework.

Adam Chapnick:

Oh wow.

Dan Doney:

So, the intention on this is really to allow anyone to take advantage of these advance technologies in the space.

Adam Chapnick:

Interesting.

Dan Doney:

Our strategy along those lines is sort of the same as Red Hat did with Linux, because they took that operating system, and they made it work for the enterprise. We do that with in our inter-operability layer against this open-sourced framework. So we think we’re far ahead of the markets.

Adam Chapnick:

Yes.

Dan Doney:

Maybe too much to some degree.

Adam Chapnick:

Well, that’s the question, right.

Dan Doney:

As often times, folks are sort of overwhelmed with the possibilities, but we’re really laying the framework for the future of finance. That’s-

Adam Chapnick:

I think you hit on something really fundamental, which a lot of times gets lost in the weeds, especially when people are so busy inventing and creating. The simple thing you said, that there’s a way to help so people don’t even have to know that they’re in blockchain, because there’s so many inherent benefits, everything that you’re doing. But if you have to explain it to someone, they don’t understand. “That’s too much for me. I’m just going to go back to my yellow pad.” You know? But if it’s just, “Here’s a way you could do something you like to do faster, or cheaper, or better. You don’t need to know how.” I think that’s going to be the key that unlocks mass adoption.

Dan Doney:

Adam, there’s no question. That’s when the industry’s really arrived, when mom and pop use it, and they really don’t care that it’s blockchain. Again, you can look at the way credit card transactions occur and all of the complexity that has to actually happen. If someone came to you and said, “Here’s how,” guess what? “I understand. I’m a give you a piece of plastic, and it’s going to be able to do a transaction, but it has to go through, and there are many, many steps, and many, many components to it.” You could say, “That’ll never work.” But if the minute where you can go buy something, swipe, and actually purchase, that’s all you need to know. Then it was, then mass adoption followed. We think we’re very close now.

So, all of the technical components that we’re doing are really to make this accessible, easy, global, practical at any level.

Adam Chapnick:

That’s incredible. Well, as usual, every time I talk to you my head is exploded all over the ceiling. It’s very exciting. I hope you know that you guys are doing incredible visionary work, and I love hearing what you’re up to every time we talk. I can’t wait for the next one, and thank you for sharing with us all of what you guys have accomplished.

Dan Doney:

Adam, my pleasure. So to the fellow security token practitioners, let’s come together in our operability framework, not ours. We’re open-sourcing it so that we can all have a baseline and build the financial services industry of the future.

Adam Chapnick:

I love it. Dan Doney.

Amy Wan:

Be sure to check out the full video on our website.

Securrency is a gold corporate member of the Security Token Academy. To learn more, go to our website securitytokenacademy.com and click on the directory tab and the corporate member homepage.

Did you know that you can get the latest industry updates in our free weekly newsletter, the Security Token Edge. The newsletter is packed full of insightful information about the security token industry. To subscribe and get your free weekly copy, go to our website securitytokenacademy.com.

We also invite you to check out the digital wrapper on Medium. It’s our new behind the scenes series with the teams building out the security token industry. These are in depth interviews covering a wide variety of topics. You can view these when you follow us on Medium. You can find out more information on our website, securitytokenacademy.com.

In a first of its kind multi-city webinar on the tokenization of commercial real estate, CREST, a project of the Security Token Academy, provided a detailed case study on the tokenization of the St. Regis Aspen Resort. Learn how this webinar destroyed the disruptive forces that are emerging in commercial real estate or CRE financing. Here’s your preview.

Adam Chapnick:

Disruption in commercial real estate has been appearing in lots of different ways. Certainly in the office category of commercial real estate, also known as CRE, the appearance of co-working companies, such as WeWork, is a major new trend. Also, the appearance of technology companies that strive to improve property operating efficiency through prop tech, or property technology, is another area of CRE disruption.

But, there’s a new type of disruption emerging in the area of CRE financing. It’s a way to raise money via a new solution, which is compliant with US SEC regulations. It’s called “tokenization”, and it is based on security tokens. This wave is barely just beginning, but examples are starting to emerge, and that’s why we’re here today as we cover the tokenization of the St. Regis Aspen Resort.

Amy Wan:

I wanted to help our viewers take a closer look at this iconic hotel. So while I was there, I had the opportunity to meet with the hotel’s general manager, Heather Steinhardt. Let’s take a look at what she had to say.

This is a gorgeous property. Can you tell me a bit about it?

Heather S:

I’d love to. We have 179 guest rooms, 30 suites. This is one of our three specialty suites, and then we also have 25 residents, two and three bedrooms, which are a fractional ownership pass.

Amy Wan:

Fantastic. What else should we know about this property?

Heather S:

Well, the rooms and our public spaces were designed by Lauren Rottet. She was wanting to make sure that we’re bringing the outside light into the hotel, that it was like a mountain side manor. That it was contemporary, yet very, very comfortable, because after you go skiing you just want to chill and relax.

Amy Wan:

Yeah.

Heather S:

So, I think she really did a lovely job in portraying those goals overall.

Adam Chapnick:

Regarding this specific property, you have the listing of JLL and sold it to Stephane and Elevated Returns. What’s the backstory on that?

Jeffrey Davis:

Yeah, 2010 we had the property on the market, and we had reached out to a number of offshore investors, and had gotten in touch with OptAsia. We had been in touch with them on previous transactions before, and we sold the asset to OptAsia and Stephane in 2010.

Rick Kirkbride:

The $19 million of tokens that were raised, what were those funds used for?

Stephane de Baets:

Well, I mean, that was a return of capital to the owner. So effectively, the tokenization is a true sale of ownership into the property. So, the current owner decided that the maximum they were willing to give away at that variation was 18.9%. So that’s what we put for sale, and we were happy enough to fill up the entire stack.

The way that it works is that you actually sell the property into an operating partnership. You create which shares interest out of the partnerships, and you capitalize the read through the sale of smart contract. Smart contract is effectively a digital share certificate. So rather than to have your fashion paper share certificate, you have a digital form of it. It’s a beautiful instrument, because all the securities regulation are actually embedded into the contract itself, and it’s cheaper. It’s faster to transact, and it offers also the ability to have a global product trading on multiple exchanges.

Jay Bernstein:

We got involved with Elevated Returns first helping Stephane in trying to liquefy in a different format, in a registered format, a traditional listed read format, the St. Regis Aspen, and then helped him transition his project to a tokenized solution. Prior to helping Stephane, we’ve also been very active in the whole idea of creating liquidity around not traditional liquidity solutions, around single-asset real estate. So, it was a natural for us to help Elevated Returns and Stephane with their project.

Henry Elder:

Everything is going to get tokenized. Your identity will be tokenized. Your title will be tokenized. Your mortgage will be tokenized. Your equity will be tokenized. I mean, that is the future, when everything is running on this integrated, efficient, immutable blockchain system.

Amy Wan:

To watch the full webinar, just go to Crest.io to register. Registration is free.

All right, that’s it for today’s episode. Be sure to follow us on Twitter, Facebook, Telegram, and Medium, and don’t forget to subscribe to our YouTube page so you don’t miss out on any of our videos and expert interviews. I’m Amy Wan, and before you go, a big thank you to our platinum corporate member Merrill Lynch, and all of our gold corporate members as well. We invite you to learn more about our corporate members by clicking on the directory page on our website.

For everyone here at Security Token Academy, thanks for watching.

Adam Chapnick:

Security Token Academy’s proud to be working with some of the biggest companies in the security token industry. Learn more about our corporate members on our website securitytokenacademy.com and click on the directory tab.