Crypto Real Estate Platform RealToken Sued by Detroit Over Safety Concerns

The city claims RealToken, a blockchain-driven property investment service, left tenants without heat, water or secure entry at over 400 Detroit homes, violating legal obligations and endangering residents. Detroit's corporation counsel, Conrad Mallett, filed the nuisance abatement suit against RealToken LLC and 165 related limited liability companies in Wayne County Circuit Court, naming co-founders Remy and Jean-Marc Jacobson personally liable.

Platform Background and Legal Implications

RealToken launched in 2019 as the first real estate tokenization platform on Ethereum, later migrating to Gnosis Chain to reduce fees. The platform quietly amassed hundreds of Detroit properties by selling fractional ownership via cryptocurrency tokens.

Detroit's suit represents what the city calls its largest-ever nuisance abatement lawsuit. The case underscores that technological innovation cannot override basic health, safety and housing obligations for property managers and landlords.

Detroit will no longer be a playground for slumlords hiding behind LLCs and crypto. This lawsuit is just the start. We’re fighting for the 100,000+ renters who deserve safe, decent housing,

City Council member Mary Waters stated.

City officials allege RealToken profited by offering fractional property ownership to investors while neglecting essential repairs, leaving homes in dilapidated, non-compliant states that invite criminal activity and jeopardize tenant well-being.

Extensive Property Damage and Tenant Impact

Inspectors flagged 53 properties as immediate health and safety hazards, noting structural damage, mold, sewage backups and rodent infestations. One tenant lived without a working shower for over two years, while another endured a collapsed porch blocking her entry.

The complaint states that vacant, dilapidated buildings under RealToken's management became magnets for squatters and crime, exacerbating neighborhood decline. Detroit is asking the court to mandate comprehensive repairs, establish rent escrow accounts for affected tenants, and impose personal financial responsibility on the Jacobson brothers for unpaid maintenance.

These defendants have profited from our communities while ignoring their most basic legal obligations as landlords and property owners. Our neighborhoods are not investment portfolios — they are homes for Detroit residents. We are sending a message: No matter how innovative your business model may be, you cannot hide behind technology or corporate formalities to evade your responsibilities as a property owner,

Detroit corporation counsel Conrad Mallett's proclamation reads.

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