9. Compliance
Compliance
Asset Avenue was intentionally designed with legal compliance and regulatory foresight at its core. As the blockchain and real estate sectors continue to evolve, one of our highest priorities is ensuring that our model does not cross into regulated securities territory. We are not an investment platform. Asset Avenue is a private membership, based club that enables collaborative participation in real-world real estate opportunities, where members contribute capital and effort—not simply capital alone.
Avoiding Securities Classification
To ensure Asset Avenue is not considered a securities offering, we’ve structured the club and token dynamics to align with key regulatory standards, particularly the criteria outlined in the Howey Test, used by regulators such as the U.S. Securities and Exchange Commission (SEC) to determine what constitutes a security.
The Howey Test defines a security based on four criteria:
An investment of money
In a common enterprise
With an expectation of profit
Derived from the efforts of others
We address and avoid these criteria in the following ways:
No Passive Income Promises: Asset Avenue does not guarantee income or profit. Members are not passive investors; instead, they are required to actively participate in the evaluation, management, and oversight of real estate assets. Only those who contribute to the operational aspects of a project are eligible for revenue sharing. This requirement removes the expectation of profit based solely on the work of others.
No Public Investment Offering: We do not market investment opportunities to the public. Asset Avenue operates strictly as a private, invitation-only club. Participation is limited to verified members who agree to the club’s terms, responsibilities, and structure.
Active Participation Model: Every project is managed by its own DAO (Decentralized Autonomous Organization), in which participating members vote on decisions, handle tasks related to the property, and oversee financial operations. This decentralized structure ensures that control and responsibility lie with the members themselves.
Ownership Through Private Arrangements: Properties are not held by Asset Avenue as an entity. Instead, for each project, members who choose to participate form co-ownership agreements or create SPVs (Special Purpose Vehicles) where they are registered owners or operational managers. This ensures that asset control remains in the hands of the participating members.
Token Utility, Not Investment: The AAV token is a utility token that provides access to membership tiers and club functionality. Staking AAV does not generate passive yield. Instead, it determines the level of access a member has within the club and the size of real estate projects they may join. Token holders do not receive rewards simply for holding or staking; they must be actively involved in projects to receive any financial benefit.
Internal Governance and Dispute Resolution
The club operates under a private association framework and implements internal governance protocols. Disputes between members are resolved internally via arbitration mechanisms before any legal recourse is considered. This reinforces our commitment to autonomy, self-regulation, and alignment with private membership standards.
No Resale or Secondary Promotion
Tokens representing shares in real estate assets may be transferred between members, but any sale or offering must remain within the boundaries of the club. There is no public market for these tokens, and members are explicitly prohibited from promoting or selling them externally. This ensures that Asset Avenue does not facilitate or encourage secondary market speculation.
Legal Oversight and Ongoing Compliance
We are committed to ongoing legal review and regulatory consultation. Asset Avenue works closely with legal advisors in relevant jurisdictions to maintain its structure within the bounds of current law. As regulation evolves, we are prepared to adapt our model to remain compliant without compromising the core values of decentralization, transparency, and member-driven collaboration.
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