A CoinDesk investigation found that the real estate-backed crypto project Tangible had a hidden business relationship with the CEO’s brother, involving properties being bought at a discount and then flipped to Tangible with markups as high as 21%. This practice of upselling was deemed unjustifiable by U.K. real estate professors who reviewed the findings.
An investor named ZilAYO began noticing “red flags” in the Tangible project a week before it collapsed in October 2023. Despite initially having no issues, ZilAYO had invested $50,000 in Tangible’s flagship token, USDR, which was designed to be stable and provide yield. However, the revelation of the CEO’s brother’s involvement led ZilAYO to sell his investment before the collapse.
The collapse of USDR in October 2023 left investors unable to withdraw their funds as the token’s liquid reserves dried up, resulting in a significant drop in value. The investigation by CoinDesk revealed that the Singh brothers had a secret agreement where properties were bought and sold at inflated prices, diverting funds from USDR’s treasury to their companies.
While Tangible claimed that the markups were disclosed and covered operational expenses, investors were left in the dark about these arrangements. The company stated that it was working on reimbursing USDR investors but declined to provide further details.
The investigation also exposed how Tangible’s opaque practices and lack of transparency raised concerns among investors, especially regarding the undisclosed markups and legal details. The company’s failure to provide clear ownership proof and legal information added to the skepticism surrounding the project.
The analysis of U.K. land registry records highlighted the significant markups on properties acquired by Tangible, raising questions about the company’s integrity and commitment to investor interests. The investigation shed light on the questionable practices employed by Tangible in its real estate tokenization process, revealing the need for greater transparency and accountability in the crypto industry.
In the aftermath of the collapse of USDR, investors are still waiting for their funds to be returned, as Tangible, now rebranded as re.al, seeks to liquidate its properties to repay investors. The challenges faced in selling the properties at fair market value underscore the complexities of recovering investments in the wake of such deceptive practices.
The stories of investors like ZilAYO, Donk3ynuts, and Pingu1 reflect the varied experiences and perspectives within the crypto community. While some investors conducted due diligence and questioned Tangible’s operations, others blindly trusted the project, highlighting the importance of education and awareness in navigating the risks of the crypto market.
Overall, the investigation into Tangible’s deceptive practices serves as a cautionary tale for investors and underscores the need for greater transparency, accountability, and regulation in the crypto industry to protect investors and uphold integrity in the market.