Hong Kong Property Firm with $6+ Billion Portfolio is Seeking Regulatory Approval to Tokenize Real Estate

Hong Kong Property Firm with $6+ Billion Portfolio is Seeking Regulatory Approval to Tokenize Real Estate

As of June 12th 2019, the South China Morning Post has reported that major property firm Stan Group is scheduled to meet with Hong Kong’s securities regulator in January 2020. Stan Group is seeking regulatory approval to sell tokenized real estate assets.


Hong Kong Property Firm Stan Group to Enter Tokenized Real Estate

The Stan Group claims to have a real estate portfolio valued at more than HK$50 billion, which equates to $6.38 billion.

The firm is now seeking something which has yet to be approved by Hong Kong’s Securities and Futures Commission (SFC). In March 2018, the SFC issued detailed guidance explaining how security tokens must abide by the commission’s existing securities laws— a similar stance to that held by the SEC in the United States.

This is precisely what makes the Stan Group’s upcoming meeting so significant. If approved to tokenize real estate assets, the Stan Group would be part of an unprecedented move in the eyes of the SFC.

In early June 2019, the Stan Group reportedly signed a Memorandum of Understanding (MoU) with Liquefy, a security token issuance platform. The MoU featured the possibility of tokenizing real estate where investors can transfer blockchain-based tokens which represent fractional ownership of real estate assets.

According to Stan Tang Yiu, Stan Group’s Chairman,

“[We] envision far better access and greater liquidity in the real estate market due to the fractional ownership that will be attained with tokenisation and our real estate exchange under development.

However, many speculate that the Stan Group has a difficult path when it comes to the SFC.

Edwin Lee, founder of SFC-licensed firm Bridgeway Prime Shop Fund Management says the SFC features complex demands which require investors to undergo strict AML verification with significant amounts of paperwork.

The trades that Stan Group is targeting, says Lee, would only be eligible to professional investors with liquid assets worth more than $1 million.

What do you think of the Stan Group trying to tokenize real estate assets in Hong Kong? Let us know what you think in the comments section below.


Image courtesy of Nikkei Asian Review.

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