Republic, the third largest equity crowdfunding portal in the U.S., launched the “Republic Realm Metaverse Real Estate Fund” in March 2021. The fund’s focus is on purchasing virtual real estate in NFT games such as Sandbox, Axie Infinity, and Decentraland. The plan is to hold the land long-term and develop it into virtual shopping malls, event spaces, and communities to accrue ‘rent’ and provide ongoing income to the fund. Investors in the fund receive dividends and can sell the metaverse land for a large profit. The fund returned 145% on invested capital between its initial launch and the December 2021 raise, which was very popular and quickly maxed out its $75 million reservation cap.
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SEC’s Crackdown
However, the fund’s performance has declined, and the Securities and Exchange Commission (SEC) has been cracking down on the space since the FTX collapse. The SEC has officially shut down the Regulation A offering, which has been in limbo since December 2021, preventing investors from investing their funds. The fund itself will continue in other forms, or a similar offering will arise, but the Regulation A offering will not proceed.
Republic said in a recent update that the offering had been canceled as they no longer saw a path forward for it due to regulatory feedback and other regulatory events that have transpired since the process began. They are working on making the necessary adjustments to eventually bring a similar offering to market.
While the SEC’s crackdown on cryptocurrencies and the decline in fund performance have affected the Metaverse Real Estate Fund, Republic is committed to finding a way forward for investors. The fund’s focus on virtual real estate in NFT games remains an innovative investment opportunity for those interested in the metaverse.
