City of Detroit Sues Cryptocurrency-Based Real Estate Firm For Neglecting 400 Blighted Properties

City of Detroit has filed the largest nuisance abatement lawsuit in Detroit’s history last week. The lawsuit targets a Florida cryptocurrency-based real estate firm operated by two brothers. The city believes the brothers are linked to a network of cryptocurrency real estate companies. These companies control more than 400 properties that are ripe with rampant blight and nuisance violations.

Many are rental properties in low-income neighborhoods. However, the dilapidated they are considered a public health threats. The properties are owned by foreign investors who bought fractional ownership through cryptocurrencies. 

The lawsuit is against Boca Raton based Real Token, LLC. It is operated by brothers Remy and Jean-Marc Jacobson and their 165 affiliated “corporate defendants.”

The lawsuit states:

“Real Token, which does business as RealT, and its network of “shell corporations and affiliates” neglected its responsibility to ensure that hundreds of properties complied with basic health and safety requirements.”

The RealT website promises “6-16%” in average rental income a year to investors. However, it’s not clear if it is promising gains of 6% to 16%. The website says RealT has attracted more than 65,000 investors in properties. Many of those investors are not based in the United States.

The company is currently advertising 10 Michigan properties on social media. The advertisement says foreign investors can own a piece of each property for around $50. The sale is not available for U.S. residents.

The  company’s website shows Jacobson brothers are co-founders and co-CEOs of Real Token.

The company in a Wednesday email blamed the conditions on “several unscrupulous property management companies.”

The brothers told the Detroit News via email:

“These companies were paid hundreds of thousands of dollars to oversee Real Token’s properties, address tenant complaints and make repairs, and maintain each of our properties in accordance with City of Detroit municipal codes,”

Real Token said those property management companies stole money from Real Token and the tenants they serve. The company had not been served the city’s lawsuit and would not comment on it.

City Officials Claim Real Token Is Lying

City Councilman James Tate and others rejected the Real Token playing the blame game. The lawsuit contended the city sent “numerous correction orders” and warnings directly to Real Token. The city says Real Token has taken no corrective actions.

Tate says Many locations have standing water and that 408 properties don’t have certifications of compliance.

The councilman also stated he and several tenants at the properties held meetings with the property managers. However, the meetings didn’t result in any improvements.

Detroit Corporation Counsel Conrad Mallett said the lawsuit seeks a number of remedies:

“First of all, we want our $500,000 in tickets. Two, we want all of these properties to pass a compliance inspection, which will entitle them to a certificate of compliance. And if you can’t get a certificate of compliance, fix the property so that you are eligible to get the ordinance-required certification that you need.”

The city is also seeking to hold the Jacobson brothers personally liable. The city is also asking the judge to take control of the entire process. The Detroit Corporate Counsel’s office wants proof that Real Token is properly attending and registering their vacant properties.

Real Token said it has been making repairs consistently:

“We know that nobody is going to feel sorry for Real Token and we have taken full responsibility for our mistakes: That is why since December 1st 2024, we have invested in our property management company to directly manage our properties, and instituted comprehensive checks and balances to ensure something like this never happens again.”

The company added:

“We took over all the properties at once and started addressing blight violations, administrative filings, servicing maintenance calls and conducting full rehabs. We have made complete repairs to over several dozens of properties, addressed hundreds of blight tickets, and have contractor teams in the field every day addressing each disgruntled tenant and city citation in turn. This process cannot happen overnight. It takes time. But we are committed to addressing every issue, and finally execute on our original mission.”