Megatel Homes LLC and MegPrime Holding LLC will soon launch the first universal payment token after they received a no-action letter from the Securities and Exchange Commission (SEC).
Megatel Homes has a land development company, single and multifamily homebuilding companies, a realty company, a mortgage company, and a title company. Megatel formed MegPrime Holding, which will offer and sell the MegPrime (MPP) Token.
“We don’t believe there is anything like this available in the U.S. market and we are very proud to say that we are the first universal payment token that has received the SEC non-action relief letter,” Zach Ipour, co-founder of MegPrime and Megatel Homes, told The Title Report. “I feel like it would be almost impossible without having non-action relief from the SEC.”
Megatel and MegPrime wanted to offer the MPP Token without being required to register it as a security under the Securities Act of 1933. Attorneys representing Megatel Homes and MegPrime sent a letter to the SEC’s Division of Corporation Finance asking the division to confirm it would not recommend enforcement action against MegPrime in connection with the digital token being offered. Jonathan Ingram, deputy chief counsel with the Division of Corporation Finance, sent a letter to the entities saying his office would not recommend enforcement action to the SEC.
“That SEC approval is really important because it creates a regulatory moat, which means that it’s going to take anybody else at least 24 months to get approval,” Sterbcow Law Group Managing Attorney Marx Sterbcow, one of the outside attorneys involved in the project, told The Title Report. “Without the approval, you’re flying blind because not only do you not have the protection from the SEC, but you also have to worry about 50 different states and registering with each state for securities things. That’s no longer on MegPrime. They don’t have to worry about that anymore. It puts them so far ahead of the game.”
The MPP Token will be marketed as a crypto asset that consumers can use for purchases and earn digital rewards through both additional tokens and points that represent the amount of dollars spent with the tokens. MegPrime is sponsoring the MPP Token and managing the rewards program, according to the letter that Megatel and MegPrime attorneys sent to the SEC.
Ipour said the universal payment token is “open to everybody,” and designed for everyday transactions such as coffee, groceries, rent and mortgage payments.
“MegPrime is designed to serve everyone, not just a single builder, market, or moment,” Ipour said. “We set out to create an open ecosystem for all renters and homeowners nationwide, one that rewards households for the full scope of their everyday spending. While most platforms are designed to make spending easier, MegPrime creates global value from the money people already spend – turning everyday financial activity into real, lasting progress, no matter where they live or who they buy from. Blockchain and digital assets have many incredible benefits to date, but this is the way they enter the lives of nearly every single American.”
The MegPrime ecosystem centers on the MPP Token that is purpose-built for household savings and achieved through a rewards program. Key features include:
- BillPay Rewards: Users who pay rent or mortgage payments with MPP Tokens through the MegPrime app may earn up to 20 percent back in MP Token rewards, which can be used for purchases such as grocery, gas, utility bills or buying a home. These rewards can also be converted to U.S. dollars.
- RentForward: Renters who pay rent with MP Tokens through the MegPrime app may be eligible to receive 100 percent of their past 12 months of rent, up to $25,000, toward a future home purchase, including down payment and other applicable home ownership benefits.
- MegaLow Rate Program: Eligible users may access mortgage rates up to 2 percent below market rate, equating to potentially thousands of dollars in long-term savings over the life of a mortgage and hundreds of dollars in monthly payment savings. The 2 percent reduction applies when users pay in MPP Token versus in U.S. dollars, through the MegPrime App
- Savings on Everyday Spending: Users earn up to 10 percent back on everyday spending through the MegPrime crypto debit card, enabling people to save everyday expenses like coffee, grocery, and gas.
On the rent program, Ipour offered an example: If someone is paying $2,000 per month in rent and they qualify for a 20 percent reward, they will receive $400 a month in rewards, which adds up to $4,800 during a 12-month period have passed. Those rewards, Ipour noted, are issued in the form of MPP Tokens, a digital currency rather than points.
“The digital currency can be exchanged on supported centralized and decentralized exchanges into U.S. dollars or USDC, allowing users to move funds to their bank accounts,” Ipour explained. “…We are creating a model where monthly rent payments help people build progress toward purchasing a home, rather than disappearing as an expense.”
Ipour emphasized the importance of having a universal payment platform to accomplish the company’s mission of providing better affordability to homeowners.
“That has been my passion to come up with some of the incentives that we can truly bridge the gap between the rentership and homeownership,” Ipour said.
Ipour’s brother, Aaron, also a co-founder of Megtatel Homes and MegPrime, noted the MPP Token and accompanying rewards system “provides a real financial lifeline to renters, homeowners, and aspiring homebuyers.”
“We’re creating a self-sustaining real estate ecosystem that harnesses the unique cost-saving benefits of blockchain technology, allowing us to offer homeownership rewards that the traditional market simply cannot match,” Aaron Ipour said. “We’ve set a new global standard for how real estate and decentralized finance can be united to serve the public good, and we’re thrilled to receive a no-action letter from the SEC.”
The MegPrime Token will be available to purchase during its upcoming Token Generation Event in the coming weeks, and at any point thereafter on the MegPrime app. It is also expected to be available through other third-party cryptocurrency exchanges.
“Throughout the reputable exchanges globally, (the) token will be launched within the next several weeks,” Zach Ipour said. “We will officially publish the token launch date within the next several days.”
Editor's note: Watch TheTitleReport.com for more from our interview with Ipour and Sterbcow discussing MegPrime's MPP Token and what it means for the industry.