Detroit's city government is taking legal action against RealToken, a cryptocurrency company engaging in a $93 million scheme involving subsidized housing. The company is accused of buying units to tokenize them for fractional ownership, ultimately profiting while neglecting tenant rights and property maintenance. Many properties operated through shell companies are in dilapidated conditions with unresponsive management. The lawsuit follows a five-month investigation revealing over $3 million owed in fines and taxes and aims to protect the homes of Detroit residents against exploitative practices in real estate.
The exploitative scheme was first uncovered by Outlier, which reported that RealToken properties are plagued by squalid conditions, unresponsive property managers, and arbitrary evictions.
Conrad Mallett, counselor for the City of Detroit, stated, "These defendants have profited from our communities while ignoring their most basic legal obligations as landlords and property owners."
Detroit announced the lawsuit after a five-month joint investigation spanning three municipal agencies.
RealToken claims it has no direct interaction with the properties it gobbles up on the blockchain - and therefore had no idea about the state of its properties.
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