Legal Compliance
Last updated
Was this helpful?
Last updated
Was this helpful?
One of the key differentiators between Homebase and many of our competitors is legal compliance. Homebase tokenizes residential real estate in a completely legal fashion by following existing securities regulation in the US.
Other companies tokenize real estate via NFTs, utility tokens, stablecoins, or a combination of the above, which do not legally represent ownership or undergo the same compliance process. If token holders expect to receive profits from the efforts of others (see ), it falls under the securities umbrella, and needs to comply with SEC regulation. To allow the issuance of tokens that are in nature securities, the SEC has published guidelines on "Security Token Issuance", which is exactly what Homebase will be following to conduct its business.
At launch, Homebase will be issuing tokens under the Reg D exemption, i.e only available to US-based accredited investors. Over time, Homebase will issue tokens under Reg S, which will allow non-US investors to participate, and eventually switch to Reg A / Reg A+ which will allow any US investor to participate, non-accredited and accredited, in our offerings.
Know Your Customer (KYC) check – mandatory process of identifying and verifying the client's identity when opening an account and periodically over time. We will be partnering with to conduct KYC checks.
Only wallets that are whitelisted can own security tokens. Thus after a customer is KYC’d, their wallet will be whitelisted.
For Reg D offerings, we must take “reasonable steps” to verify that each purchaser is an accredited investor. Thus we will take steps to verify accreditation status in our account creation process.
For Reg D offerings, tokens will be frozen for the 1st year, meaning they cannot be sold or traded to comply with securities law.
The ability to burn tokens. This allows restoring tokens in the case an investor lost access to a private key.