USPC was created by real estate native Johnney Zhang, who already owns and manages the profitable assets in which USPC is securitizing. As a real estate company utilizing blockchain technology, USPC tokenizes a professionally managed real estate portfolio – and then allocates that value to individual tokens.
As such, USPC is classified as an ERC1400 security token, which is essentially a digital version of a traditional security that utilizes a purpose-built smart contract to comply with current laws and regulations. Similar to stocks, bonds, and REITs, security tokens function as digital shares of a corporation that exist on the blockchain.
Is USPC a security?
As an asset-backed security token, USPC seems to meet the definition of a security as defined by statute in Section 2(a)(1) of the Securities Act of 1933 and Securities Exchange Act of 1934; and based on the SEC’s framework for analyzing whether a digital asset has the characteristics of one particular type of security (A.K.A. the Howey Test).
As such, compliance with both ERC1400 standards and SEC regulations require robust know-your-client guidelines, and Primior would ensure that these are in place before trading commences.
U.S.-domiciled investors, then, would need to comply with standards set by the SEC and other state and federal regulators.
The Howey Test
An investment contract is:
- an investment of money;
- in a common enterprise;
- with a reasonable expectation of profits;
- to be derived from the entrepreneurial or managerial efforts of others.
SEC v. W.J. Howey Co., 328 U.S. 293 (1946) (“Howey”)
As a security token, the value of USPC is stored in tangible real-world properties, and not on the blockchain.
Steps USPC Is Taking To Protect Its Investors
In order to ensure USPC and its investors have maximum protection, and in order for us to strive for total compliance with all regulatory requirements put in place by the SEC, we are limiting token sales to only investors who qualify under Regulation D Rule 506(c) – US accredited investors – and Regulation S – non-U.S. citizens.
When launched, the USPC Investor Portal will have automatic KYC/Investor Accreditation Verification to only allow eligible investors to purchase USPC. By only allowing investors who qualify under Regulation D Rule 506(c) and Regulation S to purchase USPC, we are ensuring that only accredited and/or qualified individuals are able to buy our tokens. This helps to create a safe and secure environment for investing, and ensures that we are making every possible effort to be in total compliance with relevant securities regulations.
When Can Non-Accredited Investors Buy USPC?
We have already initiated the process of achieving regulatory compliance in order to issue and sell USPC tokens under Regulation A. We expect to achieve full regulatory compliance for Regulation A token sales within the next 12 months, at which time, both accredited and non-accredited investors will be able to purchase USPC and participate in the real estate investing revolution through blockchain technology.
If you have any questions about USPC or the steps we are taking to protect our investors, please don’t hesitate to reach out to us. We would be more than happy to chat with you and answer any questions that you may have.