Republic, the third-largest equity crowdfunding platform in the US, has announced the cancellation of its $75 million metaverse fund. The company made the announcement following increased regulatory compliance demands by regulatory agencies in the United States.
Republic, which owns the largest portal in the UK, Seedrs, launched its “Republic Realm Metaverse Real Estate Fund” for accredited investors. The fund was launched in March 2021. Its “Test the Waters” (TTW) campaign was immensely popular with investors and soon raised $75 million in funding.
A virtual real estate that investors profit from rents
The fund was meant to be invested in virtual estate NFTs such as Sandbox, Axie Infinity, and Decentraland. Investors expected to make a profit through the long-term development of virtual real estate. The plan was to develop the virtual real estate over the long term. Projects such as virtual event spaces, shopping malls, and houses would be built and rented for profit.
Things do not seem to be working as planned at the moment, as the SEC has shut it down. This happened at a time when the investors were upbeat about the investment, which had grown to 145% by December, just 9 months after its March 2021 launch. Its ROI was no doubt responsible for its popularity among investors.
Crackdown on crypto businesses
The crackdown by the SEC is a consequence of the collapse of FTX, one of the top crypto exchanges in the United States. Republic made an announcement regarding the SEC action.
“Based on the feedback we received from the SEC as well as other regulatory events that have transpired since we began this process, we no longer see a path forward for this offering.” Unfortunately, that means that as of now, the offering will be canceled. “We are working on making the necessary adjustments to eventually bring a similar offering to market.”
Available blockchain-based investments
They did not explain what the new offerings are or how they would comply with the regulations to ensure that the SEC wouldn’t move against them. The release said that there are other blockchain-based investments that the crowd funding platform is looking at. It specifically mentioned Gameflip, a project that has already raised $10 million on Republic’s StartEngine platform.