Token Sale Agreement Template for Singapore

A Token Sale Agreement sets out the terms and conditions when a company sells digital tokens or cryptocurrencies to investors in Singapore. It's a legally binding contract that covers key details like token pricing, purchase limits, and delivery mechanisms - similar to how a share subscription agreement works for traditional securities.

Under Singapore's Payment Services Act and Securities and Futures Act, these agreements must clearly specify if the tokens qualify as regulated digital payment tokens or capital markets products. They typically include investor verification requirements, use of proceeds, project milestones, and risk disclosures to protect both the token issuer and purchasers.

Use a Token Sale Agreement when launching a digital token or cryptocurrency offering in Singapore's market. This contract becomes essential before accepting any investor funds, particularly when raising capital through Initial Coin Offerings (ICOs) or Security Token Offerings (STOs).

Companies need this agreement to comply with MAS guidelines on digital token offerings and prevent regulatory issues. It's crucial for blockchain startups, fintech companies, and established businesses expanding into digital assets. The agreement protects both parties by clearly defining token rights, distribution schedules, use of proceeds, and compliance with anti-money laundering requirements.

• Simple Token Sales: Basic agreements for straightforward token offerings, focusing on payment terms and token distribution mechanics
• SAFT-Based Agreements: Future token rights agreements adapted to Singapore's regulatory framework, used for pre-functional token sales
• Security Token Agreements: Detailed contracts for tokens classified as securities under MAS guidelines, including investor qualification requirements
• Utility Token Agreements: Specialized contracts for tokens granting platform access or services, with clear usage rights and restrictions
• Hybrid Agreements: Combined frameworks incorporating both utility and security elements, common in complex blockchain projects

• Token Issuers: Blockchain companies, tech startups, or established firms creating and selling digital tokens through ICOs or STOs
• Corporate Lawyers: Draft and review Token Sale Agreements to ensure compliance with MAS regulations and protect client interests
• Token Purchasers: Individual or institutional investors buying tokens, often including accredited investors and financial institutions
• Compliance Officers: Monitor adherence to KYC/AML requirements and ensure ongoing regulatory compliance
• Platform Developers: Technical teams responsible for token creation and distribution mechanisms outlined in the agreement

• Token Details: Document token type, total supply, pricing structure, and distribution schedule
• Business Plan: Outline project goals, use of proceeds, and development roadmap
• Compliance Check: Confirm token classification under MAS guidelines and required licenses
• Investor Rules: Define eligibility criteria, purchase limits, and KYC/AML procedures
• Technical Specs: Detail smart contract functionality, security measures, and token mechanics
• Risk Disclosure: List potential investment risks, regulatory uncertainties, and market factors

• Token Description: Detailed specifications of the digital token, including rights, features, and limitations
• Sale Terms: Purchase price, minimum/maximum investment amounts, and payment methods accepted
• Distribution Terms: Token allocation schedule, vesting periods, and transfer restrictions
• KYC Requirements: Identity verification procedures and anti-money laundering compliance measures
• Risk Disclosures: Comprehensive list of investment risks and regulatory considerations
• Governing Law: Singapore jurisdiction clause and dispute resolution mechanisms
• Privacy Policy: Data protection compliance under PDPA and related regulations

A Token Sale Agreement differs significantly from a Simple Agreement for Future Tokens (SAFT), though they're often confused in Singapore's crypto space. The key distinction lies in timing and token delivery.

• Immediate vs Future Delivery: Token Sale Agreements facilitate immediate token transfers upon payment, while Simple Agreement for Future Tokens promises future token delivery once the network launches
• Development Stage: SAFTs are used for pre-development fundraising when tokens don't yet exist, while Token Sale Agreements govern sales of already-created tokens
• Regulatory Treatment: SAFTs typically qualify as securities under MAS guidelines, requiring stricter compliance measures than many utility token sales under Token Sale Agreements
• Risk Profile: SAFTs carry higher investor risk due to project uncertainty, while Token Sale Agreements involve immediate delivery of existing assets