Update about the Platform Release, Second Funding Round and Announcement of Token Burn
We are simply doing everything we can to quickly present you with a fully functional beta of our platform. For the full launch of REALISTO we need to be in full compliance with the regulatory environment in Germany. This will require more time than we have initially anticipated. Unfortunately this has impact on the launch of the final Realisto Platform, this does not stop us from emitting REA backed projects with great ROI for you. We are aiming to deliver a proof of concept property soon.
The crypto business is subsumed into the existing framework of rules. Because these rules were not made with something like cryptocurrencies and token in mind, they are sometimes an ill fit, and are prone to produce surprising conclusions. Our legal team has now found out, that REALISTO will need to apply for a certain type of license from the German regulatory body BaFin, called a “payment provider license” to conduct business according to the business model we are proposing. To give you the precise lay-of-the-land, we need to become a little bit technical to explain fully the intricacies of the problem in hand.
Crypto markets are fraught with enormous volatility, with cryptocurrencies hitting new highs followed by deep dips, then recover, then hitting another low. This happens within minutes, hours. As project emitters (those who use the platform to capitalize their projects) can´t afford to bear the risk of falling currency prices, and since REALISTO’s business model forbids to take on this risk entirely onto itself (nobody would make any money), the model for cryptocurrency payment could look like this: When a user wants to invest into a project on the platform, the REALISTO platform receive cryptocurrency from him.
At the moment when the Investors digitally signs the investment contract. We then convert the crypto funds into fiat money. These investments are then conveyed by us to the token emitters,so that the emitters may real-world capitalize their projects.
This is the only solution to fixing a price at the time of the investment which forms the basis of all subsequent dealings. Another problem consists in the fact that in Europe there exists by law the right to withdrawal from investment contracts if the investors is a private entity. It follows, the only possible way of conducting such a deal is an “on the spot” exchange of the cryptocurrency funds involved. This, however, entails the right of the investor to withdraw from the contract and be refunded in fiat money at the market-value currency price, fixed at the time the exchange has been made originally. A setup like this requires the above mentioned payment processor licence.
Originally, before we were confronted with this, we were under the impression that these requirements might be dealt with by securing the services of a partner who is licensed in Europe. It turned out, that such firms would also have to be licensed in Germany and this new requirement is due to stricter financial regulation compared to the rest of Europe.
Another issue that is surfacing right now is that global regulation of cryptocurrencies and, especially the token economy, is imminent! Of course, you all also know, that the “Utility Token” trick is no longer working: namely, that type of token that pretended not to be a “security” in the sense of the law, because it claims not to bear the functionalities of a security. But of course, it does. At this time, all token that constitute shares in a venture, no matter what their other functionalities might or might not be, are for all intents and purpose now deemed “Security Token”. For this reason, crypto exchanges around the world could come under intense pressure for offering trading of those disguised securities.
Since there is currently no crypto-exchange licensed to trade security token we will have to find a partner with that licence to list the tokens our emitters on the platform are looking to emit.
Release of Platform Beta
Meanwhile, we will very soon roll out a beta version of the platform. The beta already interacts seamlessly with the blockchain, and we can safely say that from the tech standpoint we will be ready for action when the license has come through. Please keep in mind that fully 90% of all ICOs simply fall flat on their faces, and those who initiated them just pack up and make for the hills. We at REALISTO, however, strongly believe in the future of our project. We will keep at it, diligently working through the changing aspects of the crypto business and the vagaries connected with it. We are aware of our responsibility for our investor’s money. And by going the way to become a fully regulated platform with an exchange annex, we are making good on our promise to turn REALISTO into a highly profitable venture!
Second funding round / Token Burn
Due to the recent unforeseeable developments in the market, we decided to call off the second funding round. Instead we will burn the total amount of 2,000,000 REA and the corresponding amount of team tokens.
The new total supply of REA will be 1,429,667.586182092519814916 REA
The tokens will be burnt today, April 5th at 22:30 GMT +1
Thank you for your ongoing support,
Rouven & Leonard