Liechtenstein Regulators Approve Ethereum-Based land Fund
The AARGOS Global land Fund was approved as an alternate investment fund (AIF) by Liechtenstein's Financial Market Authority (FMA), the corporate announced. The fund provides exposure to a worldwide land portfolio through AARGO security tokens – built on the ethereum blockchain – with each token representing one share within the fund.
The fund was created by Ahead Wealth Solutions, a financial services provider based within the nation's capital Vaduz, together with Bank Frick and blockchain technology provider Token Factory.
AARGO tokens are designed to make sure only legally compliant transactions are often executed, Token Factory said during a blog post at the start of the week. In other words, only investors who have completed the requisite KYC/AML forms can actually hold the token.
The fund's tokenization also will create "greater efficiency and a better degree of automation within the transmission process," said Bank Frick head of fund and capital markets Raphael Haldner during a statement.
Speaking to CoinDesk, Bastiaan Don, Token Factory's director , said performing on a public blockchain also presented opportunities for the financial sector. Funds are shielded from manipulation by a centralized entity. Being on the ERC-20 token standard means the corporate can readily integrate with a "growing decentralized finance (DeFi) ecosystem," he said.
"[You could] easily integrate with, for instance , lending applications, so you'll get some liquidity out of your tokenized assets," he said. Private or permissioned blockchains may need some advantages within the short term, he said, but "people will realize that they're missing out on all the fun and great applications that are built on public blockchains."
AIFs are EU-regulated financial vehicles that raise capital from investors and invest these funds with the aim of creating favorable returns. Although Liechtenstein isn't an EU member country, its businesses can operate within the only market because it complies with the bloc's financial regulation.
The Liechtenstein government has previously said it might avoid "excessive" blockchain regulation and therefore the FMA has previously approved an idea for offering tokenized public offerings for retail investors. Approval by the regulator means the AARGO fund can now begin onboarding assets and promoting itself to investors.