Gate News reports that on March 17, according to WIRED, the tokenized real estate platform RealT, founded by Canadian brothers, is facing legal and compliance crises. The platform splits properties in Detroit and other locations into approximately $50 crypto tokens, selling to over 16,000 investors worldwide, claiming annual returns of up to 12%. Its asset portfolio once reached about $150 million, and it branded itself as “one of the world’s largest real estate tokenization platforms.” The Detroit city government filed a civil lawsuit against RealT and its 165 related LLCs starting in 2024, accusing them of hundreds of violations related to urban blight, unpaid taxes, and other issues. The lawsuit revealed that at least 408 properties lack proper compliance certificates, with serious disrepair, water leaks, fire hazards, and some properties even occupied by gangs acting as “black landlords.” The court subsequently barred RealT from collecting rent or evicting tenants until the properties are brought into compliance. RealT blamed the responsibility on property management and local partners, denying systemic neglect. Currently, RealT plans to sell a large number of properties, suspend rent distributions to global investors, and shift to issuing “preconstruction” tokens in Colombia and Panama.
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