Crowdlitoken is a Liechtenstein-based blockchain startup with its headquarters in the town of Triesen. Since 2018 this young real estate company allows investors to participate in a European core real estate portfolio. Investors can select their properties, determine their individual risk-return-profile and choose freely between cash flow realization and capital growth.
This represents an evolution in the world of financial products. New technologies are enabling us to launch a first-class product that not only offers new investment opportunities, but also remedies inefficiencies, cuts costs and safeguards transparency.Crowdlitoken CEO Domenic Kurt
The CRT token
Crowdlitoken offers a digital representation of a subordinated bond, whereby both the bond and the underlying real estate is digitised via blockchain. The token – named the “CRT” – replicates the income streams and the value changes of the real estate properties. Holders of the tokens can select their properties to invest in and thereby tailor their portfolio. The ability to invest small amounts in selected European real estate, the easy tradeability on digital stock exchanges (in preparation) and the investment flexibility are key innovative features of this unique real estate investment product.
Blockchain legislation is very advanced and pursues an open approach to regulating the token economy, which is still in its infancy. In addition, Liechtenstein is member of the European Economic Area which facilitates and allows access to the EU market.
The tokenisation of the European real estate market:
Crowdlitoken uses blockchain technology, digital processes and so-called tokenisation to invest in real estate. The advantage for investors is that the hurdle for an investor friendly lies as low as EUR 100 per investment, which is much lower than usual investment ticket sizes. The attractive real estate asset class remains interesting for qualified investors, but is now also being democratised for small and occasional investors and is therefore opening up to new target groups with smaller funds available.
In addition, the newly designed digital investment platform is quite flexible and surprises with some additional innovations. Investors do not necessarily have to invest in a whole basket of European properties, but can instead focus on one or more properties of their choice.
At the center is a regulated bond with Crowdlitoken:In mid-April 2019, the Liechtenstein Financial Market Authority (FMA) approved the prospectus for public distribution by Crowdlitoken. As part of the marketing authorisation for retail investors, the company launched the public sale of the security token in what is called STO (Security Token Offering).
First the STO, then the real estate portfolio
The low hurdle for investments in selected European properties (from 100 Swiss francs or EUR equivalent), the tradeability and the flexibility of the digital bond are remarkable innovations of this real estate investment product and are likely to meet with interest.
Crowdlitoken has brought experts in real estate and international finance on board to ensure that this does not remain a matter of interest but is followed by concrete actions and investments. Lawyer Hans Kuhn, former Head of Legal Affairs and Services at the Swiss National Bank (SNB) and current board member of Crowdlitoken, has ensured that the Security Token meets all regulatory and legal requirements.
The founders plan to generate 100 million Swiss francs with the STO. As soon as the sum of CHF 45 million has been reached, the development of the real estate portfolio is to start – initially in Switzerland and Germany, with other European countries to follow later.
Switzerland will not be left out: Swiss Financial Market Supervisory Authority (FINMA) confirmed that there is no license necessary for Crowdlitoken in Switzerland. The start of trading is planned for the second quarter of 2020 via the SIX Digital Exchange (SDX), which has been under development for some time and is currently being set up by SIX.
Crowdlitoken joined The Security Token Alliance
The Security Token Alliance, an alliance that brings together organisations advancing the security token industry, recently announced that CROWDLITOKEN is among the latest to partner with the Alliance. The Security Token Alliance is founded on the belief that the present and future of digitized securities will benefit from wide participation in projects and an ecosystem for stakeholder connections. The organisation was founded in May 2019 by Frederik Bussler who is also member of the European Commission’s AI Alliance.
New expert on board:
On October 29th, 2019 it has been announced that Renato Fassbind will join as new members of the Board of Directors. Top expert Fassbind will also sit on the Board of Directors of its subsidiary Crowdlitoken AG. The former top executive of various major Swiss corporations, such as Credit Suisse and ABB, is impressed with the business model, strategy and technology of the fintech company based in Triesen, Liechtenstein.
On the topic of his newest commitment, Renato Fassbind states:
What I like most at Crowdlitoken is the business model, the technological orientation and the unerringly consistent strategy. I also feel a strong belief in the product, which permeates from the Board of Directors through to the management and to the employees.”´
Renato Fassbind holds several positions on the boards of directors of Swiss companies, he is Vice President of reinsurance company Swiss Re AG in Zurich, is a member of Nestlé S.A. and transport giant Kuehne + Nagel International AG.
The advantage of blockchain
A blockchain-based system brings along the advantage that one can invest in the bond in Swiss francs, euros or the crypto currency Ethereum (ETH). Similar to a real estate fund, annual management fees of 0.75 percent as well as a further three percent are charged for purchase or sale. In addition, there is a success fee in the positive case.
Since all data is checked and tracked using blockchain technology, transparency is significantly increased and there is no need to go through an intermediary, which further reduces any charges. Meanwhile, this puts a stop to potential fraud and manipulation.
However, to my opinion this does not mean that the bond is safe for investors. One shall always have in mind that it bears a double risk: On the one hand there is the usual investment risk of a real estate investment similar to a real estate funds or real estate shares. If there is a collapse in prices on the real estate market, which can never be completely ruled out, investors would have to reckon with investment losing significantly in value.
In addition, a risk is associated with the innovative financial instrument of a security token. It is not yet possible to assess whether the new financial vehicle of a security token will prove its worth because experience is simply lacking. In particular, it is not possible to estimate how the instrument would react in case of market distortions.
When it comes to security, one should be aware that although one invests in real estate, Crowdlitoken is registered in the land register for the properties. In the event of a crisis, you would have to assert possible claims against the company and would not be secured by land register law yourself.
Against this background, I would not invest money which you would need to save for buying a new home or financing your children’s education or even saving for retirement! I can generally only recommend investing in such a new instrument very cautiously and not take any unnecessary risks if possible.
If you are convinced of the bond, you could at best invest a small amount in it, but not the entire capital you have available because otherwise you would be running a cluster risk with imponderables, which I would definitely prevent. However, given the fact that some banks are thinking of charging for money being deposited, we need alternative investment options.
About CROWDLITOKEN AG
CROWDLITOKEN AG is a Liechtenstein-based start-up that provides investors with access to European core real estate via blockchain technology. This is based on real estate-linked security tokens – termed “CRTs”, CRTs are fully compliant and combine the advantages of direct and indirect real estate investments.
Paid content. The advice here given is not a financial advice even though my excitement might make it look like such. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence.
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