Sounds like a go-to way to make money: combine Atlanta’s booming real estate market with the booming world of cryptocurrency.
Some landlords say it was lucrative for the man buying homes with controversial cryptocurrency, but not for the people on the other side of the deal.
Mike Cherwenka calls himself the “Godfather of Real Estate”.
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In one of his contracts, about 30% of the deal was paid in something called Troptions.
When Channel 2 investigative journalist Justin Gray went to him with people’s complaints, Cherwenka said the problem was because people didn’t understand how to use their Troptions.
Joe Cebalos thought he knew what he was getting into. He thought he was entering the ground floor of a growing cryptocurrency called Troptions during a real estate transaction.
“I was like, ‘Oh, he gives free money,'” Cebalos said.
But another owner, who asked not to be identified, said she had no idea what a Troption was until she looked at the final sale contract for her home in the Atlanta subway.
“There was a large sum of money that was placed in a Troptions account,” the owner said.
Troptions are a cryptocurrency. About 30% of the payment for both houses was going to be paid in excess, not US dollars.
Cebalos told Gray that he now had a very different view of Troptions.
“I call it an s — coin,” Cebalos said.
US Secret Service agent Easton Espinosa also classifies Troptions in this category.
“Essentially just a coin that has very little value,” Espinosa said.
“It falls – in your mind – into this arena,” Gray asked Espinosa.
“Yeah, I think a lot of people think that’s it,” Espinosa said.
This is why the owner has given up on the sale.
“Nobody told me how to withdraw the Troptions from the account and convert them to cash,” the owner said.
It’s because you can’t.
According to the Secret Service, which is responsible for protecting the country’s financial infrastructure, the main red flag with Troptions is that, unlike Bitcoin, you cannot cash out.
Surcharges cannot be converted to US dollars or any other currency.
“If the major exchanges aren’t going to trade it, you have to find someone peer-to-peer to offload it,” Espinosa said.
This is why after seeing the paper value of his Troptions skyrocket to over a million dollars, Cebalos realized that they were actually worth nothing.
“Inside it’s like I’m boiling,” Cebalos said.
Cherwenka was the buyer in these transactions.
“No, it’s not a poo play, man,” Cherwenka told Gray.
He is also an evangelist for Troptions.
“It’s like being saved, telling everyone about Jesus. I just told everyone about Troptions,” Cherwenka said.
Cherwenka purchased a large amount of Troptions and then began writing them into her real estate transactions.
“In the real estate business, you know, everyone is asking for more for their property than it’s really worth,” Cherwenka said. “Well, they got free money, or in legal terms, they got found money.”
But that’s not how Cebalos sees it now.
“For him it was good. But for others it was a nightmare,” Cebalos said.
In 2019, Missouri Secretary of State Jay Ashcroft filed a cease and desist order against Troptions founder Garland Harris for allegedly misleading consumers.
“We are a free country that we want to be. We want to let people make their own decisions. But when people are being scammed, when people are breaking the law, we step in,” Ashcroft told Gray.
“Right now, we’re like in the second inning of a nine-inning baseball game,” Cherwenka said.
“So you think if someone who sold you one of those houses is going to win in the end?” Gray asked Cherwenka.
“Of course they are. Absolutely,” Cherwenka said.
“Are they winning right now with them?” Gray asked Cherwenka.
“Of course they are, they just don’t know how to use them,” Cherwenka said.
But it’s not that complicated. You need to find someone else willing to trade their real estate for your troptions.
“It’s not a deal I would take,” Ashcroft said.
“Tell me why not,” Gray asked Ashcroft.
“Well, if I’m selling something of value, I’d like to know that I’m getting something of value in return,” Ashcroft said.
“Do you have to find someone willing to take those Troptions for it to be worth anything?” Gray asked Cherwenka.
“OK. Say for example.
“Right? Yes or no? Yes or no?” Gray asked.
“For a barter coin, yeah. You trade for something else,” Cherwenka said.
Cherwenka tells us he didn’t do anything illegal. The contracts spell out what a Troption is and it’s up to the seller to do their research.
A Georgia judge has agreed that Cherwenka did not make any promises or say anything that would be considered fraud.
Cherwenka told Gray that Missouri’s cease and desist order had been rescinded.
But the Missouri secretary of state said it was only because the defendant, the founder of Troptions, was dead.
“If the individual you’re talking about wants to come to Missouri and wants to try to get people to invest in Troptions, I think he’ll find the deal isn’t dead at all,” Ashcroft said.
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“If I offered you Troptions for this house, would you make a deal implying that Troptions would be the buyer?” Gray asked Cherwenka.
“I have Troptions, so I’m not interested in selling the house,” Cherwenka said.
“Don’t you want more?” If it’s so great, wouldn’t you want more? Gray asked.
“I’ve got plenty of Troptions, don’t bait with those questions,” Cherwenka said.
About an hour after the interview, Cherwenka texted Gray saying he wanted to fix this, saying he would sell his house to Gray if Gray overpaid.
But it’s a deal that experts like Missouri’s secretary of state and the US Secret Service would warn against Gray.
Cherwenka also emailed Gray a few days after the interview to say that if and when the Troptions trade on the exchange, buyers can cash out their investments.
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