Real World legal questions regarding NFT's & Smart Contracts

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6

Hi Mark,

There are a few questions here so I will take them one by one:

  1. You mention that you are concerned “with regard to the completeness of the NFT as collateral”. The NFT as used in the Centrifuge service and Tinlake protocol is not intended as collateral. As was pointed out in Discord and as highlighted in the video you shared, there is no current way to create an onchain security interest in real world assets. As this is not possible under current law, we do not do this. The collateral held by the SPV and backing the DROP and TIN tokens, is held solely in the real-world and not onchain via an NFT or otherwise.

  2. You also raise concerns about whether the parties have accepted the cookies on our website and whether this includes privacy terms. Like most websites, the Centrifuge.io site includes a pop-up banner where users accept cookies. There is also a privacy policy which can be accessed here: Privacy Policy | Centrifuge: Real World DeFi

  3. Finally, you raised issues with the Risk Factor provisions in the pro forma Subscription Agreement also found on our website. Please note that is a form of agreement that we have provided for the issuers as a convenience, but that the actual subscription documents for specific pools will be different. In terms of the Risk Factor provision you cited, please note that it is standard for asset-backed securities that the investors do not have direct recourse against the collateral held by the SPV. Instead, in case of an insolvency of the SPV, there would be a liquidation of the underlying assets and the proceeds would be distributed pro rata to the investors. This arrangement ensures fair treatment for all investors and avoids that one investor gains a better recovery by accessing the collateral directly. The pools using the Tinlake protocol operate in the same manner; DROP and TIN tokenholders do not have direct recourse to the assets held by the SPV. That is the meaning of the provision that you have cited on Discord.

I hope that I have covered your concerns, but if I have missed anything please let me know. Thank you again for your engagement.

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