Legally Compliant

One of the key differences between Robinland and many of its competitors is legality. Robinland tokenizes real estate asset in a completely legal fashion in compliance with all current SEC regulations in the U.S.

Many other companies tokenize real estate via NFT, utility tokens, stablecoins, or a combination of the above, which do not legally represent ownership or undergo the compliance process. Utility tokens are supposed to be instruments that carry certain functions while security tokens are investment contracts. If token holders expect to receive profits from the efforts of others (see Howey Test), it falls under the security umbrella, and needs to be in compliance with SEC rules. To allow the issuance of tokens that are in nature securities, the SEC has published guidelines on "Security Token Issuance", which is exactly what Robinland will follow to conduct its business.

In the U.S., to issue securities, one in principle needs to "register" it, meaning IPO. However, there are exemption clauses that allow one to issue securities without the IPO process if certain conditions are satisfied. For example, if all investors are US-based accredited investors, this falls under the Reg D exemption; if all investors are non-US investors, this falls under the Reg S exemption, etc. To begin with, Robinland will be issuing tokens under Reg D, i.e. to US-based accredited investors. Over time, Robinland will also release projects under Reg S (to non-U.S. investors) and Reg A+ (to any investor in the U.S.).

In other words, Robinland will be issuing tokens representing fractions of the underlying real estate assets, which are by definition securities, under the SEC regulations "Security Token Issuance", and the exact procedure will be certain exemption clauses such as Reg D, Reg S, or Reg A+, based on the needs of specific real estate projects. This "Security Token Issuance" simply substitutes the traditional digital share certificates with on-chain digital securities based off of well-established token standards that use computer code to enforce the security laws.

What are Security Tokens?

Security tokens are digital representations of securities (like debt, equity, or real estate) on a blockchain. Much like traditional securities, security tokens are subject to regulation and need to conform to strict compliance standards.

By leveraging blockchain technology, security tokens (or digital securities, as they’re sometimes called) allow for many traditionally cumbersome and highly manual processes to be automated, and provide a golden source of truth that all parties can depend on.

The security token market is expected to balloon to $1.5T in Europe alone by 2024 and Deloitte predicts that security tokens will become a mainstay of the future securities landscape.