Hold onto your crypto wallets, folks! The city of Detroit has filed a lawsuit against RealToken LLC, a real estate firm that uses blockchain technology to tokenize properties and sell fractional ownership to investors. Apparently, they’ve been neglecting over 400 residential properties, and the city ain’t happy about it.
According to the complaint, the defendants – including RealToken LLC, co-founders Remy and Jean-Marc Jacobson, and 165 affiliated corporate entities – have allowed these properties to deteriorate like a sad, abandoned Jenga tower. 🏚️😱
City inspectors found all sorts of issues, from structural damage to rodent infestations, mold growth, sewage backups, and even some shady utility connections. 🐀💩🔌
Detroit claims that RealToken used a network of limited liability companies, many registered as shell entities, to avoid accountability and leave tenants in unsafe living conditions. 😠
The city is asking the court to mandate urgent repairs, establish rent escrow accounts, and hold the Jacobson brothers personally liable for allegedly refusing to fund necessary maintenance through former property management companies. 💸
RealToken launched in 2019, allowing investors to purchase shares in rental properties via cryptocurrency from any corner of the globe. Their whitepaper claims the model lowers investment barriers and increases transparency in traditionally illiquid markets. 🤑
However, critics argue that the fractional ownership model has led to vacancies because properties are often acquired as investment assets rather than maintained as active rental homes. 🏠🔒
As a result, many homes have been left empty, deteriorating over time, and contributing to neighborhood decline. 😞
“This is the largest nuisance abatement case in our history,” said Corporation Counsel Conrad Mallett. “Innovation does not exempt firms from fulfilling legal responsibilities.” 🚨
Global interest in tokenized real estate is rising, with Deloitte projecting the market to grow to $4 trillion by 2035. The tokenization model is gaining traction as blockchain platforms make real estate more accessible through fractional ownership, thereby lowering capital requirements while also improving market liquidity. 🚀🏠
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2025-07-04 09:24