The German Federal Financial Supervisory Authority (BaFin) has granted marketing authorization and registration to Munich-based BITREAL Capital GmbH for a cryptocurrency and real estate hybrid fund.
Founded 2017, BITREAL Capital is a “fund initiator and innovator” in the area of special alternative investment funds (AIFs). It provides professional and regulated solutions to cryptocurrency owners and investors as well as traditional professional and semi-professional investors.
The company’s BaFin-registered fund for semi-professional investors, called BITREAL Real Estate Blockchain Opportunities Fund 1 (BREBCO1), combines core commercial real estate with a blockchain token share. The company claims that BREBCO1 will be the first hybrid fund of cryptocurrency and real estate in Germany, and it is aiming for an equity volume of 40 million euro ($48.9M USD).
BREBCO1 aims to invest in blockchain technologies through established tokens, coins and cryptocurrencies as well as AA core commercial real estate, partly financed by bank loans, in the top 10 economic regions in Germany. This will minimize the investment risks related to crypto funds but will provide a high return potential. The company said it expects to generate a 15 percent return annually over a seven-year fund lifetime.
“A unique element of the fund series is the possibility to make deposits into the fund via Euro or directly via cryptocurrencies such as bitcoin or ethereum,” the company said. “Holders of cryptocurrencies, coins or tokens, by investing in BREBCO1 fund, get an effective hedge for existing profits. At the end of the term, Euro investors also have the opportunity to choose whether they want to receive the repayments and profits in Euro or alternatively in virtual currencies, coins or tokens.”
In February of this year, BaFin issued a “letter of advice” on the regulatory classification of tokens issued via initial coin offerings (ICO). To ensure full compliance with legal requirements, BaFin said market participants are required to check closely the existence of a regulated instrument, such as a financial instrument or a security.
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