There Are Clear Regulations for Digital Assets, Balcony DAO Co-founder Says

It is common for the blockchain industry to argue there hasn’t been any “regulatory clarity” or fair regulation of digital assets, however, John Belitsky, co-founder of real estate DAO Balcony DAO, objects to it.

“There are regulations in place”, said Belitsky last week  to Decrypt at Chainlink’s SmartCon Event in New York.

Private Placement and Regulation D and CF are Exist

Belitsky explained, “Private placement offerings exist, Regulation D and CF offerings exist. You follow those protocols already laid out for you, and you can release these tokens in a compliant way.”

Meanwhile, a DAO, or decentralized autonomous organization, is an organization with a decentralized control structure.

A DAO uses smart contracts on a blockchain to implement actions, and participants use governance tokens to vote.

The Balcony DAO was founded in October 2021 with the goal of bringing real estate investing onto the blockchain.

“We are not a DAO in the traditional sense. A traditional decentralized autonomous organization cannot exist with regulated securities,” Belitsky notes.

According to Belitsky, members of DAOs do not need to reveal their identities in order to participate in the organization.

“I hate to burst everybody’s bubble, but real estate is a centralized asset class. It lives in one place. It will never be decentralized,” he added.

Two Places For DAOs to Exist in

Belitsky says properties can still be managed using the DAO model despite the centralized component.

He said, “There are two places for DAOs to exist in real estate. The first one is on the asset level, and the second is the community.”

A group, for instance, might buy a building and turn it into a special purpose vehicle (SPV) – essentially making it a DAO. A special purpose vehicle is used to invest in and buy real estate and rental properties.

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