By David Drake
Hedge Funds looking at opportunities
There are a lot of developments in the initial token offerings globally. Some of them are pursuing existing businesses for existing clients, such as this company that I started advising. There’s a lot of flurry and news about cryptocurrency and tokenization but it’s very simply explained that it removes middlemen and automates processes as a utility. The utility’s value is the efficiency and savings that it produces. LAToken (Liquid Asset Token) is looking to share their story both in Europe and in the United States.
The US Securities & Exchange Commission just announced that they will consider tokenization as a security. We have to abide by the SEC rules to be able to raise capital in the US. This is a necessity to protect US citizens and investors from being defrauded on a global basis. Of course, if a utility is akin to a game where you buy a token to play then it might not be considered as a security. However, we recommend that anybody in this space rely on a good lawyer to guide them on what is best.
Blockchain Infographic
Credit: PwC
The CEO of LAToken, Valentin Preobrazhenskiy, shares how to use LATokens in our everyday activities. I had the chance to interview him for this article.
David Drake: What does LAToken do? Can you try to explain it to me in layman’s terms that the readers will understand?
LAToken tokenizes and makes tradable fractions of assets ranging from real estate and loans to works of art. We decentralize and tokenize assets globally using the blockchain technology.
Asset owners receive funds by tokenizing their assets and selling them on the LAT (Liquid
Asset Token) marketplace. These owners sell a fraction of an asset instead of borrowing and thus do not incur any interest obligations. At the same time, sellers may continue using assets after the sale without paying any rent.
LAToken offers unique opportunities for investors of any size to own fractions of assets previously accessible only to large investors (e.g., real estate, works of art). Thus, they can increase their ROIs and diversify their portfolios.
David Drake: How long have you been operating?
The platform is based on an existing home equity marketplace that I founded in 2013.
David Drake: How did you get started?
Prior to LAToken, I had established Zalogo, a non-blockchain financial platform. Its principal business was providing private borrowers with bank loans backed by the value of their real estate assets. The home equity lending marketplace has facilitated 12,000 home equity offers from 7 banks and 25 investors in the past 6 months and its operations are profitable.
Before that, I created a back office for 2 hedge funds and had been managing equity portfolios for 7 years.
David Drake: What problems does LAToken solve?
Among the problems LAToken solves are:
- unlocking the value of illiquid assets
- tokenizing and making tradable fractions of assets ranging from real estate and loans to artwork
- decentralizing asset ownership
- reducing dramatically the transaction cost of selling assets
- giving access to new asset classes to all investors
David Drake: How do you see your company growing?
My dream is to make NASDAQ on Blockchain with a wider range of tradable assets and a dramatic reduction of listing costs, settlement time, and transaction costs.
Fascinating to see the progress in the tokenization market. Can this be transferred to Hedge Funds? Let us see how big this gets as we explore Cayman structures to expand on asset management for international clients.
DISCLOSURE: This article explores what a cryptocurrency can accomplish and how hedge fund investors can understand this asset class. My LDJcrypto Cayman cryptocurrency hedge fund is one such investment considering trading LAToken.com when they list on a crypto exchange.
