The Tangible Collapse: A Cautionary Tale in Crypto Real Estate
October 17, 2024, 10:10 am
In the world of cryptocurrency, the allure of high returns often blinds investors to lurking dangers. The recent collapse of Tangible, a crypto project backed by real estate, serves as a stark reminder of this reality. What began as a promising venture quickly spiraled into chaos, revealing a web of deceit and questionable practices.
Tangible aimed to revolutionize real estate investment through blockchain technology. Its flagship token, USDR, was designed to maintain a one-to-one peg with the U.S. dollar, promising stability and yield. Investors flocked to the project, drawn by the prospect of earning returns of 20-80% from rent-generating properties. However, beneath the surface, a troubling narrative was unfolding.
The CoinDesk investigation unveiled a troubling relationship between Tangible's CEO, Jagpal Singh, and his brother, Joshvun Singh. The brothers orchestrated a scheme where properties were purchased at discounted prices and then flipped to Tangible at inflated rates. This practice, with markups reaching as high as 21%, raised eyebrows among real estate experts, who deemed such price increases unjustified.
As the dust settled, it became clear that investors were left holding the bag. On October 11, 2023, a bank run drained USDR's liquid reserves, causing its value to plummet from $1 to 50 cents. The panic was palpable. Investors who had trusted Tangible found themselves unable to withdraw their funds, trapped in a sinking ship.
The hidden arrangement between the Singh brothers siphoned off at least £875,590 from USDR's treasury, with estimates suggesting the true figure could be in the millions. Investors were misled, believing their money was backing a stable and transparent investment. Instead, they were caught in a tangled web of familial ties and undisclosed markups.
Tangible's representatives attempted to downplay the situation, claiming that the markups were previously disclosed and covered operational expenses. However, the lack of transparency left many investors feeling betrayed. The company's focus shifted to redeeming investors, but the damage was done. Trust had evaporated.
The allure of "real world assets" (RWAs) in the crypto space promised to inject liquidity into traditional finance. Proponents argued that tokenizing real estate could democratize access to investments. Yet, the Tangible debacle highlighted the risks of operating outside established financial regulations. While traditional real estate investment trusts (REITs) are bound by transparency and disclosure requirements, Tangible skirted these rules by operating offshore.
Investors were drawn to the idea of a "money REIT," believing that blockchain technology would provide a clearer picture of their investments. However, the reality was far different. Tangible withheld crucial legal details, leaving investors in the dark about the true nature of their holdings. The promise of transparency in the crypto space often proved to be an illusion.
The investigation revealed a series of questionable transactions. For instance, a two-bedroom home in Halifax was purchased by a Tangible special purpose vehicle for £167,782, shortly after being acquired by Joshvun's company for £138,500. This 21% markup on the same day raised red flags among experts, who noted that such practices are typically avoided in legitimate real estate transactions.
The tangled web of ownership and pricing continued to unravel. A 24-flat building in Hull was sold to USDR's treasury for $2.32 million, despite the fact that Tangible had acquired it for £1.56 million just days earlier. The discrepancies in valuations and undisclosed fees painted a troubling picture of a company more focused on profits than investor interests.
As the fallout from the Tangible collapse continues, investors are left grappling with the consequences. Many are still waiting for their money back, while the company, now rebranded as re.al, faces the daunting task of liquidating nearly 200 properties. The question remains: how can investors trust a company that has already betrayed their confidence?
The Tangible saga serves as a cautionary tale for the crypto community. It underscores the importance of due diligence and transparency in an industry often characterized by hype and speculation. Investors must remain vigilant, questioning the motives behind seemingly lucrative opportunities.
In the end, the promise of crypto real estate may still hold potential, but the path is fraught with peril. The Tangible collapse is a stark reminder that not all that glitters is gold. As the dust settles, the lessons learned from this debacle will echo throughout the industry, urging investors to tread carefully in the murky waters of cryptocurrency.
The world of crypto is a double-edged sword. It offers opportunities but also harbors risks. The Tangible collapse is a stark reminder that investors must navigate this landscape with caution, armed with knowledge and skepticism. In the end, the price of trust can be steep, and the consequences of misplaced faith can be devastating.
Tangible aimed to revolutionize real estate investment through blockchain technology. Its flagship token, USDR, was designed to maintain a one-to-one peg with the U.S. dollar, promising stability and yield. Investors flocked to the project, drawn by the prospect of earning returns of 20-80% from rent-generating properties. However, beneath the surface, a troubling narrative was unfolding.
The CoinDesk investigation unveiled a troubling relationship between Tangible's CEO, Jagpal Singh, and his brother, Joshvun Singh. The brothers orchestrated a scheme where properties were purchased at discounted prices and then flipped to Tangible at inflated rates. This practice, with markups reaching as high as 21%, raised eyebrows among real estate experts, who deemed such price increases unjustified.
As the dust settled, it became clear that investors were left holding the bag. On October 11, 2023, a bank run drained USDR's liquid reserves, causing its value to plummet from $1 to 50 cents. The panic was palpable. Investors who had trusted Tangible found themselves unable to withdraw their funds, trapped in a sinking ship.
The hidden arrangement between the Singh brothers siphoned off at least £875,590 from USDR's treasury, with estimates suggesting the true figure could be in the millions. Investors were misled, believing their money was backing a stable and transparent investment. Instead, they were caught in a tangled web of familial ties and undisclosed markups.
Tangible's representatives attempted to downplay the situation, claiming that the markups were previously disclosed and covered operational expenses. However, the lack of transparency left many investors feeling betrayed. The company's focus shifted to redeeming investors, but the damage was done. Trust had evaporated.
The allure of "real world assets" (RWAs) in the crypto space promised to inject liquidity into traditional finance. Proponents argued that tokenizing real estate could democratize access to investments. Yet, the Tangible debacle highlighted the risks of operating outside established financial regulations. While traditional real estate investment trusts (REITs) are bound by transparency and disclosure requirements, Tangible skirted these rules by operating offshore.
Investors were drawn to the idea of a "money REIT," believing that blockchain technology would provide a clearer picture of their investments. However, the reality was far different. Tangible withheld crucial legal details, leaving investors in the dark about the true nature of their holdings. The promise of transparency in the crypto space often proved to be an illusion.
The investigation revealed a series of questionable transactions. For instance, a two-bedroom home in Halifax was purchased by a Tangible special purpose vehicle for £167,782, shortly after being acquired by Joshvun's company for £138,500. This 21% markup on the same day raised red flags among experts, who noted that such practices are typically avoided in legitimate real estate transactions.
The tangled web of ownership and pricing continued to unravel. A 24-flat building in Hull was sold to USDR's treasury for $2.32 million, despite the fact that Tangible had acquired it for £1.56 million just days earlier. The discrepancies in valuations and undisclosed fees painted a troubling picture of a company more focused on profits than investor interests.
As the fallout from the Tangible collapse continues, investors are left grappling with the consequences. Many are still waiting for their money back, while the company, now rebranded as re.al, faces the daunting task of liquidating nearly 200 properties. The question remains: how can investors trust a company that has already betrayed their confidence?
The Tangible saga serves as a cautionary tale for the crypto community. It underscores the importance of due diligence and transparency in an industry often characterized by hype and speculation. Investors must remain vigilant, questioning the motives behind seemingly lucrative opportunities.
In the end, the promise of crypto real estate may still hold potential, but the path is fraught with peril. The Tangible collapse is a stark reminder that not all that glitters is gold. As the dust settles, the lessons learned from this debacle will echo throughout the industry, urging investors to tread carefully in the murky waters of cryptocurrency.
The world of crypto is a double-edged sword. It offers opportunities but also harbors risks. The Tangible collapse is a stark reminder that investors must navigate this landscape with caution, armed with knowledge and skepticism. In the end, the price of trust can be steep, and the consequences of misplaced faith can be devastating.