Token Sale Agreement Template for Malaysia

A Token Sale Agreement sets out the terms for buying and selling digital tokens or cryptocurrencies in Malaysia's emerging digital asset market. It outlines how investors can purchase tokens, what rights they receive, and how the issuing company will use the funds - all while following Securities Commission Malaysia guidelines and the Capital Markets and Services Act.

Beyond basic sale terms, these agreements protect both parties by clearly stating token features, lock-up periods, and risk disclosures. They're especially crucial for Malaysian companies launching Initial Coin Offerings (ICOs) or Security Token Offerings (STOs), as they help ensure compliance with local securities laws and digital asset regulations.

Use a Token Sale Agreement when launching any digital token offering in Malaysia, especially before accepting investments or publishing your whitepaper. This document becomes essential once you've developed your token economics and are ready to engage with potential investors - particularly for projects seeking to raise more than RM100,000.

The agreement proves vital during regulatory reviews by Securities Commission Malaysia, helping demonstrate your compliance with digital asset guidelines. It's also necessary when structuring complex token distributions, establishing vesting schedules, or creating different investor tiers with varying purchase limits and benefits.

• Simple Token Sale Agreement: Basic version for straightforward token sales under RM100,000, with standard investment terms and basic compliance provisions.
• Security Token Agreement: Enhanced version for tokens classified as securities under Malaysian law, including detailed investor rights and regulatory compliance measures.
• Utility Token Agreement: Focuses on tokens providing functional access to platforms or services, with clear usage rights and platform integration terms.
• Multi-tier Token Sale Agreement: Features varying purchase limits, bonus structures, and vesting schedules for different investor categories.
• Platform-specific Agreement: Customized for specific blockchain platforms like Ethereum or Binance Smart Chain, with technical integration details.

• Token Issuers: Usually tech startups or established companies launching digital tokens, responsible for drafting terms and ensuring compliance with SC Malaysia guidelines.
• Legal Counsel: Malaysian lawyers specializing in fintech and securities law who draft and review the agreements for regulatory compliance.
• Investors: Individual and institutional buyers purchasing tokens through the agreement, including both retail and accredited investors.
• Platform Operators: Digital asset exchanges or trading platforms that facilitate token sales and must verify agreement terms.
• Compliance Officers: Internal team members ensuring adherence to anti-money laundering rules and token sale regulations.

• Token Details: Document your token's technical specifications, utility features, and total supply allocation structure.
• Pricing Structure: Define token price, minimum purchase amounts, and any bonus tiers or early-bird discounts.
• Investor Categories: Outline requirements for different investor types under Malaysian regulations and their respective purchase limits.
• Compliance Documentation: Gather your Securities Commission registration details and anti-money laundering procedures.
• Platform Requirements: Detail the blockchain platform specifications, smart contract code, and technical integration needs.
• Risk Disclosures: List all potential investment risks, market volatility factors, and regulatory uncertainties.

• Token Description: Detailed specifications of the digital token, including its technical features and utility functions.
• Purchase Terms: Clear pricing, payment methods, and token distribution timeline following SC Malaysia guidelines.
• Investor Rights: Specific entitlements, voting powers, and any platform access privileges granted to token holders.
• Compliance Declarations: Anti-money laundering commitments and Securities Commission Malaysia registration details.
• Risk Disclosures: Comprehensive list of investment risks and market volatility warnings.
• Dispute Resolution: Malaysian jurisdiction clause and arbitration procedures under local law.
• Termination Rights: Conditions for contract cancellation and refund mechanisms.

A Token Sale Agreement differs significantly from a Simple Agreement for Future Tokens (SAFT) in several key aspects, though both relate to digital asset transactions in Malaysia.

• Timing of Token Delivery: Token Sale Agreements facilitate immediate token transfers upon payment, while SAFTs promise future token delivery once the network launches.
• Regulatory Treatment: Token Sale Agreements typically govern utility tokens ready for use, whereas SAFTs are considered investment contracts under Malaysian securities laws.
• Risk Profile: SAFTs carry higher risk as they deal with pre-development projects, while Token Sale Agreements cover existing tokens with established features.
• Investor Rights: Token Sale Agreements grant immediate token ownership rights, but SAFTs only provide a contractual right to receive tokens in the future.