Freeport clears SEC Reg A review for tokenized art offerings

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On March 29, non­fun­gi­ble tokens start­up Freeport announced that it had passed a Reg­u­la­tion A review by the U.S. Secu­ri­ties and Exchange Com­mis­sion to launch its blockchain plat­form for crowd-own­er­ship of a four-piece col­lec­tion of Andy Warhol prints. Each piece con­sists of 10,000 shares, with a min­i­mum pur­chase of 10 per indi­vid­ual, allow­ing a max­i­mum of 1,000 indi­vid­u­als to own a piece of the Warhol art. 

The under­ly­ing pieces are prints of icon­ic blue-chip Warhol works, includ­ing Mar­i­lyn (1967), Dou­ble Mick­ey (1981), Mick Jag­ger (1975), and Rebel With­out a Cause (James Dean) (1985). Cur­rent Andy Warhol paint­ings on the mar­ket can fetch any­where between $6 to $195,040,000 apiece, accord­ing to MutualArt. 

As told by Freeport, the SEC clear­ance allows retail investors to gain frac­tion­al own­er­ship of the fine arts mar­ket, which is typ­i­cal­ly exclu­sive to high-net-worth indi­vid­u­als due to pric­ing. “Cus­tomers can dis­play their pieces in a high-res­o­lu­tion per­son­al gallery, select frames, and view oth­er com­mu­ni­ty mem­bers’ gal­leries with rich social inter­ac­tions that include com­ments, likes, and more,” wrote the Freeport team. Col­in John­son, CEO and Co-Founder of Freeport, commented:

“As more and more val­ue moves on-chain, frac­tion­al­ized art is increas­ing­ly being sought after by a younger, yet less finan­cial­ly flex­i­ble, class of investors.”

Any­one offer­ing secu­ri­ties in the U.S. must either reg­is­ter with the SEC or seek an exemp­tion. The Reg­u­la­tion A exemp­tion allows com­pa­nies, main­ly star­tups, to raise $20 mil­lion in 12 months in a Tier 1 offer­ing or $75 mil­lion in 12 months in the more strin­gent Tier 2 offer­ing. On April 18, Gary Gensler, chair­man of the SEC, will tes­ti­fy before the House Finan­cial Ser­vices Com­mit­tee on reg­u­la­tion towards cryp­to assets.

Andy Warhol’s Mar­i­lyn Mon­roe Por­trait | Source: Fine Art Studies

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