Berlin-based blockchain start-up Fundament announced on Tuesday that it had been granted approval by the country chief regulatory body for the €250 million Ethereum token sale. It will be a security token sale backed by real estate bonds.
The token, which Fundament will start marketing next month, will run on the public ethereum blockchain using the ERC-20 standard popularized by the 2017 initial coin offering (ICO) explosion.
Blockchain real estate is a busy space. Florian Glatz, co-founder of Fundament Group, said typically what has been seen in the past are private placements that have not required a prospectus or a financial market authority’s approval.
Fundament will not use an investment bank but will distribute the securities itself to lower issuance costs and increase returns for investors, said Robin Matzke, another Fundament co-founder.
Buyers can pay for their tokens with bitcoin, ether, U.S. dollars or euros. For those who pay fiat, Fundament says it will deliver the tokens on a hardware device.
Fitting the project within the strictures of MiFID II – a European regulatory framework that was drafted with other things in mind – was a challenge.
“We handed in the prospectus in December 2018 and got approval last week. So it was 6 or 7 months of work,” said Matzke. “Every two or threee weeks you get 20 pages back from the regulator of things you have to change, and so on, back and forth over a period of months and it ends up being like a book. Ours has close to 100 pages.”
Germany has been one of the leading European countries in terms of blockchain innovation. However, there hasn’t been any crypto boom in the country yet. Fortunately for the industry, the attitude of German authorities towards digital assets is changing for good. Recently, the German Central Bank, Bundesbank, stated that potential benefits of Libra shouldn’t be ignored.