Get 1 person to join and get a rebate of 1,500 yuan. Invest 100,000 yuan and become a billionaire? This company has been vigorously promoting the tokenization of overseas real estate. Some people who have paid the money say it's like "using a toothpick to move the Earth".

Digitally manage and tokenize idle real estate, transforming it into tradable on-chain warrants (RWA). Can you really "make the money of two properties with one" once it's listed?

Recently, Shenzhen Second Residence Online Information Technology Co., Ltd. (hereinafter referred to as Second Residence) has been actively recruiting partners on social platforms. It claims that investing 3,000 yuan gives you a chance to become a millionaire, and investing 100,000 yuan to obtain the agency right for a prefecture-level city, along with a 45% share from secondary distributors, can help you realize your dream of becoming a billionaire.

So, can Second Residence's model really revitalize idle real estate? Where does the high return for investors come from? Is its business legal and compliant? A reporter from National Business Daily (hereinafter referred to as the reporter) conducted an investigation.

1. Promising High Returns to Recruit Partners, Claiming to Have Developed Dozens of People in Multiple Provinces and Cities

Since early September, the reporter found that Second Residence, headquartered in Shenzhen, has been promoting the digital management business of properties such as seaside villas and holiday hotels on WeChat mini-programs while intensively recruiting RWA partners.

(Editor's note: RWA, an abbreviation for Real World Assets-tokenization, refers to the transformation of real-world assets into tradable digital asset warrants based on blockchain technology.)

On September 22, the reporter contacted Fan Jia, the founder of Second Residence, as an investor. He immediately sent a "major business opportunity": You can get 10 tokens for free by scanning the QR code and registering as a "Preferred Member of Second Residence" with your real name.

"These 10 tokens will be worth at least 500 yuan after the listing. At the same time, you'll get the distributor permission and can get a 30% commission for recommending friends to invest. If you complete a team of 100 people registering with their real names, you'll automatically be upgraded to a secondary distributor and hired as a junior partner, receiving a millionaire token option reward."

According to Fan Jia, RWA partners are divided into three levels: 600 junior partners in the first batch (threshold: 3,000 yuan), 100 senior partners (threshold: 30,000 yuan), and 30 co-founder partners (threshold: 100,000 yuan).

 Recruitment information for Second Residence RWA partners

According to Second Residence's promotional materials, the team has recruited dozens of partners, covering areas such as Guangdong, Hainan, Zhejiang, Jiangsu, Jiangxi, Shaanxi, and Hong Kong. The members include chairmen of investment companies, B&B investors, general managers of property management companies, heads of manufacturing industries, and former credit managers of banks.

The reporter's investigation also found that in addition to partners, Second Residence has several internal departments, including a research institute, a business school, a sojourn university, and an RWA service and certification standard team.

The general manager of a cultural development company in Jiangxi became a junior partner this year. He said confidently, "This is a great investment like 'using a toothpick to move the earth.' Once the assets are listed and traded, the return is guaranteed."

"Now, during the initial stage of the team, the discounts are very generous," the partner gave a money-making idea: During the current initial stage, after investing 3,000 yuan to become a junior partner, you can get a 50% rebate for each new partner you recruit, and you can also get a commission for bringing in real estate digital management business. "The core is to recruit new members and attract new fans."

"The key for you now is to spend a small amount of money to get Second Residence tokens and obtain the priority agency right," Fan Jia didn't hide the reason for recruiting people. "After six months, when the partner fundraising is in place, we'll start the listing process on the Hong Kong or Singapore Stock Exchange and complete the on-chain process of real estate. The larger the scale of the underlying assets, the higher the market value of the tokens, and the more dividends the partners will get." The "Exclusive Agency Agreement for Second Residence Managed Cities" he provided also shows the cooperation framework.

Exclusive Agency Agreement for Second Residence Managed Cities, photographed by the reporter

During the reporter's undercover investigation, Fan Jia also pointed out that token trading is not allowed in China, so tokens are given as rewards.

2. Claiming to Absorb Existing Real Estate in China and Issue Tokens Overseas to Attract International Investors

Tianyancha shows that Second Residence was established in 2013, and its registered address is Room 1806 - 1807, Block C, Grand China IFC, Futian District, Shenzhen. On the afternoon of September 29, the reporter went to this address and found that it was actually a construction company. The staff said they had never heard of "Second Residence" since they moved here in 2019.

Subsequently, the reporter went to the registered address of its subsidiary, "Shenzhen Second Residence Town Development and Management Co., Ltd." - the 7th floor of Huaqiang North International Maker Center in Huaqiang Square, Futian, Shenzhen. There was no one working there, and the on-site decorators said they were decorating for an electronics company.

After contacting through various channels, the reporter met Fan Jia himself. At that time, he was giving a business presentation to several investors from different industries.

According to Fan Jia, the core of Second Residence's RWA tokenization business is to absorb existing idle real estate in China, upgrade and transform it into high-value-added "digital assets," and then divide it into several shares according to the property rights and annual usage time of the income rights for sale, implementing "share-ization" in China and "tokenization" overseas: After the digitalization of assets forms a scale, corresponding tokens will be issued overseas based on these assets as the underlying assets to attract international investors to help domestic project parties realize cash flow. "Many overseas tokens are 'air tokens,' but we have underlying assets, so it's not that difficult to issue them on the platform."

When asked by investors, "The domestic model is rare. Is there any compliance risk?" Fan Jia replied, "Chapter 8 of Part II of the Civil Code stipulates that real estate can be jointly owned by shares or jointly, but the actual application is insufficient; the license issue can be solved by cooperating with licensed institutions in the future, but the cost is relatively high."

To prove the reliability of the project, he provided a "BSN-DDC Basic Network Blockchain On-chain Certificate," which shows that the on-chain entity is indeed Second Residence, the underlying chain is the Tai'an Chain of BSN (Blockchain Service Network), and the on-chain time is September 5 this year.

Public information shows that BSN was initiated in 2018 by the National Information Center in conjunction with China Mobile, China UnionPay, etc., as a blockchain public infrastructure.

Fan Jia also said that the Second Residence tokens (SHC) obtained by partners are listed on the "Feixiaohao" platform. However, an insider in the blockchain token investment service industry in Shanghai pointed out that the Tai'an Chain belongs to the domestic open alliance chain, and SHC does not meet the RWA issuance characteristics.

Second Residence token SHC and its introduction listed on the "Feixiaohao" platform 

On the morning of October 24, the reporter called BSN (Blockchain Service Network) as a business inquirer. The staff member who answered the phone told the reporter that first, there must be assets. BSN mainly provides relevant environment and technical support (such as on-chain technical services) for asset on-chain (RWA). The involved operations and relevant legal responsibilities shall be borne by the applicant.

So, what's the relationship between on-chain and token issuance? The other party replied, "On-chain and token issuance are two different businesses, and currently, token issuance is not supported in China. A core function of on-chain is to realize the digitalization of assets. After digitalization, assets can be circulated through legal tender or stablecoins, providing a channel for financing."

However, the tokens issued by Second Residence are not legal tender. Moreover, even stablecoins must be pegged to legal tender or real assets.

3. The "Underlying Assets" Are Denied Cooperation by Developers, and Second Residence Argues It's Just for "Demonstration"

What's the real situation of Second Residence's "underlying assets"?

From the Second Residence Preferred mini-program, the home page has sections such as real estate management and sales management, displaying projects of brand developers such as Vanke, Financial Street, and Greentown, located in Guangdong, Guangxi, Hainan, etc. However, when the reporter verified with some developers, the projects denied having any cooperation with Second Residence.

Various digital assets shown on the Second Residence mini-program

The Huafeng Qianhaiwan project in Bao'an District, Shenzhen, is one of the projects shown on the mini-program: The digital management fee for a 177-square-meter property is 2% (i.e., 230,000 yuan), claiming to "make the money of two properties with one." However, Yang Wanli, the marketing director of the real estate sector of Huafeng Century Group, clearly told the reporter, "Neither the residential nor the apartment properties of Huafeng have any cooperation with Second Residence."

Promotional content on the Second Residence mini-program

After verification, the staff of Hainan Sanya Sunrise Sightseeing Co., Ltd., the project party of the Zhongjiao Greentown Sanya Gaofu Town project in Hainan, said that the company has never contacted Second Residence and has no RWA asset cooperation. The sales office staff of Gaofu Town also reminded, "We're not clear about the Second Residence mini-program. Don't believe the promises."

In addition, the mini-program shows that the total investment of the Financial Street Xunliao Bay project in Huizhou is 3.6 million yuan, planned to be divided into 45 shares (80,000 yuan per share), and partners can get a 10-fold return in five years. However, an insider of Huizhou Financial Street Real Estate Co., Ltd. said, "We have no idea about Second Residence at all. The relevant information is completely false."

Promotional content on the Second Residence mini-program

On the eve of the National Day, the Partner Committee of Second Residence sent a group message saying, "After the holiday, the rights and interests of RWA partners will increase in price, and Shenzhen Kempinski Hotel has agreed to participate in RWA."

Messages sent by the founder of Second Residence to potential investors recently

On October 13, the reporter went to Shenzhen Kempinski Hotel. Hardy, the front desk manager, said that the two parties had talked about cooperation recently, but "no agreement has been reached yet, and we haven't received any notice about the establishment of a demonstration base."

Why do some project parties deny the "underlying assets" shown on the Second Residence mini-program?

Fan Jia explained that his team had talked about cooperation with grass-roots sales staff, but it wasn't crucial. He further explained that some project parties have close contacts with Second Residence,