Lofty has since replied to this and I have shared their response here:

https://old.reddit.com/r/algorand/comments/oy2xlx/updatei_emailed_lofty_over_my_concerns_and_they/

Anyone else keeping a close eye on Lofty? I have concerns that I have not seen answered by the team.

Also, we as a community, need to keep a watchful eye on the programs that seek to make use of the Algorand blockchain. We can not navigate this space blind to the possibility of rug-pulls and bad actors. You can be both a supporter of distributed ledger and skeptical of new projects in the space.

Anyway, my concerns:

• Tokenized real estate. Are they securities? If yes, can we please see the SEC registration? If you are raising capital without the proper registration, please show us your Regulation D exception. The Howey test is commonly used to evaluate if something is a security or not, Lofty tokens seem to me a security under this criteria.

• Withdrawal - is it true that there is currently no way to withdraw said rental income other than emailing support?

• LLC Ownership - Okay so, the common defense I've seen is that a new LLC is created for each property and the token holders are listed as members of the LLC. Is there documentation somewhere that shows this ownership? What if I buy 51% of the tokens? Can I move it to new management and screw everyone else?

Come on guys, someone help me out here. I love blockchain, DeFi, anonymity, and distributed ledger. I want this space to be the future, but I can't blindly accept every new project.

Thoughts?