The Securities and Exchange Commission recently announced plans to crack down on crypto schemes and cyberthreats that could take advantage of investors. Given the growing attention on all things crypto in commercial real estate, that could mean additional attention on related activities.
Cryptocurrencies and blockchain technologies are making their way into CRE in such applications as paying rents, providing collateral for loans, marketing apartments, using NFTs to auction lease rights, or tokenizing fractional building ownership.
But making it work is complicated. Creating a full solution takes significant effort and expertise and there are potential problems. At the very least is volatility of cryptocurrency assets that could create the perception of shady dealings. The legal issues can also be tricky, leaving investors thinking they bought a metaverse property, for example, when rights are fewer than they assume and contractual issues could expose them to loss.
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