Token Purchase Agreement Template for the United States

A Token Purchase Agreement is a comprehensive legal contract that governs the sale and purchase of digital tokens under United States law. This document establishes the terms, conditions, and legal obligations between token issuers and purchasers, ensuring compliance with complex federal and state regulations governing digital assets.

When do you need this document?

You need a Token Purchase Agreement when conducting any token sale or initial coin offering (ICO) in the United States. This includes utility token sales, security token offerings, and private token placements. The agreement is essential for blockchain startups raising capital through token sales, established companies launching digital asset initiatives, and investment funds participating in token purchases. It's particularly crucial when selling tokens to U.S. residents or through U.S.-based platforms, as federal securities laws apply regardless of where the issuing company is located.

Key legal considerations

The most critical aspect is determining whether your tokens qualify as securities under the Howey Test, which examines investment contracts based on monetary investment, common enterprise, and expectation of profits from others' efforts. Your agreement must include comprehensive representations and warranties from both parties, detailed risk disclosures covering market volatility and regulatory uncertainty, and clear transfer restrictions to maintain compliance. Anti-money laundering (AML) and Know Your Customer (KYC) provisions are mandatory, requiring purchaser identity verification and source of funds documentation. The agreement should address token delivery mechanisms, vesting schedules if applicable, and specific conditions precedent that must be met before the sale completes.

Legal requirements in United States

Under federal law, token sales must comply with the Securities Act of 1933 and Securities Exchange Act of 1934, requiring either SEC registration or qualification for specific exemptions like Rule 506(b) or 506(c) under Regulation D. The agreement must incorporate guidance from SEC Release No. 81207 and subsequent digital asset guidance. State-level compliance requires adherence to "Blue Sky" laws in each state where tokens are offered, money transmitter licensing where applicable, and state-specific cryptocurrency regulations. Financial compliance obligations include Bank Secrecy Act reporting requirements, CFTC regulations if tokens are deemed commodities, and consumer protection law compliance. The Commodity Exchange Act may apply if tokens function as commodities, requiring additional regulatory considerations and potentially CFTC registration requirements.