Detroit Cracks Down: Crypto Real Estate Platform Faces Legal Heat for Safety & Health Breaches
Motor City throws the book at blockchain-based property disruptors—turns out 'decentralized' doesn't mean 'above the law'.
When code meets concrete: How a crypto housing play allegedly cut corners on basic tenant protections while chasing those sweet, sweet token valuations.
City attorneys claim the platform ignored everything from fire safety to lead paint—proving once again that in the rush to tokenize assets, some founders forget buildings actually need to house humans.
Bonus jab: Nothing says 'Web3 innovation' like getting sued for 19th-century tenement violations while your whitepaper promised 'Uber for real estate equity'.
Fractional ownership
Real Token LLC (operating as RealToken Inc. and branded as RealT) had allegedly been "quietly acquiring" hundreds of properties in Detroit, "selling fractional ownership through cryptocurrency," Detroit council member Angela Calloway told local media at a press conference on Tuesday.
Fractional ownership refers to the process of tokenizing real-world assets and splitting them, allowing multiple investors to own a single asset through the purchase of shares collectively.
Real Token's whitepaper claims it "made history" by launching the "world's first real estate tokenization platform" on ethereum in 2019, later moving its token's base blockchain to Gnosis Chain, claiming Ethereum's rising fees at the time "no longer made sense."
Asset tokenization could "apply to asset classes that are typically considered illiquid," and could thus benefit from "improved transparency, efficiencies, and lower minimum investments," an explainer from Real Token reads.
Edited by Sebastian Sinclair
