Deal or no deal? Island sellers speak
GREAT Keppel Island's sellers have rubbished reports of a $300 million plan to resurrect the resort in the world's largest cryptocurrency property deal.
News Queensland has confirmed the company behind the reported deal are not the preferred buyer after a two-month expressions-of-interest process over the sale of the defunct resort, off the central Queensland coast.
Golfer Greg Norman, chairman of Great White Shark Enterprises, stars in a glossy sales video touting the potential of Great Keppel Island in a pitch reportedly linked to the unnamed cryptocurrency consortium.
Under the plan, reported by The Sydney Morning Herald, investors would be invited to fund the $300 million development through a security token offering, similar to an initial public offering for shares.
Great Keppel Island owner Terry Agnew - who plunged $50 million of his personal fortune into obtaining development approvals and a 100-year lease for the 162ha site, with its own airstrip - did not return calls yesterday.
But sources at Mr Agnew's Tower Holdings, which owns over 70 per cent of GKI, said the crypto consortium was not the preferred buyer.
Australian economist Professor John Quiggan said the reported deal using cryptocurrency "rang plenty of alarm bells".
"Resort islands have been doing badly for quite some time now, notably including Dunk and South Molle,'' said Professor Quiggan, author of Zombie Economics: How Dead Ideas Still Walk Among Us.
He said to resort to creative financing for an activity such as a $300 million island development was not a good sign.
University of Western Australia Centre for Software Practice director David Glance said it came at a time of growing concern about initial coin offerings being thinly disguised scams.
"When people claim that a currency is 'backed' by an asset - it is really not clear how that is supposed to work in practice,'' he said.
"Investing in property of this type is already high-risk, and so investors are increasing that risk significantly through the use of a cryptocurrency."
Google announced a ban on all advertising promoting cryptocurrencies and ICOs in March, after a similar move by Facebook in January. European and US authorities have also warned of the risks of investing in ICOs.
ICOs are banned in China and South Korea.