Thanks to an opportunistic real estate broker, a network of northern Colorado churches is adopting blockchain technology to secure their sanctuary. Pray for its investors.
By Nina BambyshevaForbes Staff
In In the Middle Ages, the Church exercised its power over souls by selling indulgences, money in the form of silver or gold coins exchanged for a quicker ticket out of purgatory. Fast forward to the 21st century in northern Colorado, where another type of religious pledge is being offered, one that doesn’t promise salvation but rather aims to buy the oldest church in Fort Collins.
Leave room for GoFundMe. This is a modern take on community investment, led by local pastor Blake Bush, who is leading an effort to raise $2.5 million to purchase the Old Stone Church, a historic 19th-century stone building that his community has been leasing for two years.
Pastor Blake Bush
Photo of the Colorado House of Prayer
Bush, 57, is no ordinary clergyman. A former franchise salesman and 34-year ministry veteran, he and his wife founded the nondenominational Third Day Church and later founded One Hope of Northern Colorado, a nonprofit ministry that runs the Colorado House of Prayer. “We’re not a church,” Bush says. “We’re THE “The church, a network of churches working together to bless our community.” The Colorado House of Prayer, currently housed in the old stone church, is a place where volunteers run the operations and anyone can lead a prayer at almost any time. Several denominations currently rent the space. For example, every Sunday at 2:30 p.m., the High Mountain Korean Church holds a service.
In the summer of 2022, Pastor Bush fell down the crypto rabbit hole when a friend introduced him to the cryptocurrency XRP. Ripple Labs, the company that developed the token, had once promised that its digital ledger would replace banks to facilitate trillions in money transfers around the world, but despite XRP being valued at $31 billion by cryptocurrency traders, Ripple hasn’t accomplished much in the past decade. Intrigued, Bush bought some XRP and quickly found himself immersed in the possibilities of blockchain. “I just started researching and listening, trying to understand what they’re doing,[Ripple’s]lawsuit with the SEC… who is the SEC, what does it do, and what does blockchain do? Where is this thing going?” He says the idea of tokenizing real estate “entered his mind” in February.
“I heard the Lord say, ‘Symbolize the building,’” Bush said. “I thought, ‘What?’ I didn’t even know what that meant. I’m interested in this technology, but I couldn’t have said that because it’s not in my vocabulary. I’ve been praying for this for years, and God said, ‘Son, go get my house.’”
Enter REtokens of Spokane, Washington, founded in 2022 by Tyler Vinson, 45, whose real estate brokerage Extant shares headquarters with the digital asset operation. Vinson, a local real estate agent who earned his bachelor’s degree in marketing from Eastern Washington University, has more than 20 years of experience and is the author of “Freedom Through Cash Flow.” Tokenizing properties like the old stone Bush Church could be just the gimmick needed to breathe new life into Vinson’s real estate business.
In late May 2024, REtokens and Polymesh, a Switzerland-based organization that provides software for the blockchain of the same name, announced that they would jointly tokenize $30 million in real estate, “providing increased liquidity and a broader investor base to the real estate market.” The press release doesn’t mention the duo’s only other apparent asset tokenization: a $2.25 million preferred stock offering in August 2023 for REtokens itself. According to the private placement memorandum made available to accredited investors, more than $150,000 of the proceeds would go toward repaying a loan from Vinson’s Extant, and REtoken’s payroll, which includes Vinson as CEO, would absorb nearly 24% of the funds each year. Adding in marketing costs, blockchain fees, and conference/travel expenses, “business costs” are expected to absorb up to 40% of tokenization proceeds in the first year.
While the offering statement doesn’t include any specifics on how investors will actually benefit from their investment in blockchain-based REtokens, the shares were initially priced at 75 cents each, with a minimum investment of $5,000. Vinson’s new blockchain company intends to take $10,000 up front for new tokenizations, plus up to 0.74% per year in “participation fees” on newly created tokens. So far, REtokens has raised less than half of the $2.25 million in tokenized preferred stock it began offering a year ago.
BOld Stone Church in Lake Bush is one of Vinson’s first real estate tokenizations. The first phase, launched Friday, targets accredited investors with a minimum of $50,000 to invest and seeks to raise $2.5 million in the first year to purchase the 11,457-square-foot stone building. Old Stone Church is currently owned by one of Blake’s parishioners, Warren Yoder, who owns a Chevrolet dealership and auto body business in northern Colorado, who purchased it in 2022 for $2.2 million.
The Stone tokens will eventually be available on the secondary market, presumably to non-accredited worshipers, at a price of $500 per token, with a minimum investment of $1,500. These tokens will be traded indefinitely, or as the initiative’s website puts it, “until Jesus returns or until the majority of investors and the board of directors decide to sell them.” Several locals have already joined Old Stone’s board of directors, including the mayor of nearby Severance, Colorado, a mortgage broker, and an insurance salesman.
Potential investors don’t need a special crypto wallet; instead, they’ll need to set up an account with REtokens and go through a know-your-customer process, much like buying stocks on Fidelity, REtokens’ Vinson explains. In effect, buyers are buying securities, not crypto. The tokens won’t be traded on exchanges like Coinbase or Binance, but only tradable through REtokens. And because the small offering falls under Regulation D of the Securities Act of 1933, Old Stone Church will be exempt from the rigorous disclosure requirements of a publicly traded company. Token holders also won’t have any say in how the church is run.
When asked what the consequences would be if a Satanist bought the majority of the tokens, Bush said, “I’d say, ‘Great, thanks, I’ll introduce you to Jesus.'” The Old Stone Church will be run by its board of directors and an operating agreement, he said, so even a majority shareholder won’t be able to decide how the building is used. Token holders will only be able to vote for the chairman of the board and for or against the sale of the building.
Bush’s House of Prayer in Colorado is nondenominational: “All churches that belong to Jesus are welcome, regardless of their theological background.”
Photo of the Colorado House of Prayer
Unlike traditional church and synagogue fundraisers, which are offered by nonprofits and are therefore tax-exempt, congregants who want to “invest” in their church will not receive any tax deduction. Token holders will be subject to normal income and capital gains taxes, which will come in the form of K-1 partnership distributions. “Even Jesus had to pay taxes and have treasure,” Bush explains.
As for returns, the pitch deck calls for “an annual increase of 2-3% on each token based on the increase in real estate values in downtown Fort Collins. In addition, each year there will also be a small dividend based on the modest rent collected by the LLC.” Pastor Bush takes managing investor expectations seriously. “You’re not in this to make a profit. You’re in this to do good in the community,” he says. The pitch deck notes that investors will use their money to “advance the kingdom.”
Old Stone Church is the first tokenized church, according to Graeme Moore, head of tokenization at Polymesh, but it may not be the last. Mark Elsdon, a minister and developer from Madison, Wisconsin, and author of Gone for good?writes that up to 100,000 Christian church properties, or one-quarter to one-third of all churches in the United States, are expected to be sold or repurposed over the next decade.
Hundreds of these properties are already being snapped up by companies to house offices, restaurants, co-working spaces and hotels. New Yorkers may remember the 1983 conversion of the neo-Gothic Holy Communion Episcopal Church, built in 1844, into the Limelight nightclub, famous for its drug-fueled parties. A more recent example is the Good Shepherd Lutheran Church on Lake Opeka in Des Plaines, Illinois, which was transformed into an upscale Mediterranean restaurant.
Pastor Bush’s vision extends far beyond Fort Collins. He dreams of starting a foundation to help others tokenize their historic buildings. He may be right. Given the fanaticism of every community, religion and blockchain may be a perfect match.
After the article was published, REtokens informed Forbes that it had raised $1.46 million, or 65%, of REtokens’ $2.25 million offering and eliminated an equity fee.
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