Token Sale Agreement Template for South Africa

A Token Sale Agreement sets out the legal terms when companies sell digital tokens or cryptocurrency to investors in South Africa. It covers key details like token pricing, purchase limits, and investor rights while ensuring compliance with the Financial Intelligence Centre Act (FICA) and other local crypto regulations.

The agreement protects both token issuers and buyers by clearly defining payment terms, delivery schedules, and usage restrictions. It typically includes Know Your Customer (KYC) requirements, risk disclosures about virtual assets, and specific provisions aligned with the South African Reserve Bank's position on cryptocurrency trading.

Use a Token Sale Agreement when launching a new cryptocurrency or digital token offering in South Africa. This agreement becomes essential before accepting any investor funds, particularly when raising capital through Initial Coin Offerings (ICOs) or Security Token Offerings (STOs).

The timing is crucial - implement this agreement during your pre-sale planning phase, before marketing to potential investors. It helps meet FICA compliance requirements, establishes clear token distribution terms, and provides the legal framework needed for the Financial Sector Conduct Authority's (FSCA) regulatory oversight. Many startups and established companies use it when transitioning from traditional fundraising to blockchain-based financing.

• Basic Token Sale Agreement: Covers fundamental terms for simple token sales, focusing on price, delivery, and basic investor rights
• Security Token Agreement: Includes additional compliance measures for tokens classified as financial instruments under FSCA guidelines
• Utility Token Agreement: Designed for tokens that provide access to specific platform services or features
• Pre-Sale Token Agreement: Offers early-bird terms and special conditions for initial investors
• Enterprise Token Agreement: Contains robust governance provisions for large-scale corporate token offerings

• Token Issuers: Tech companies, startups, or established businesses launching cryptocurrency or digital token offerings in South Africa
• Legal Counsel: Corporate lawyers and fintech specialists who draft and review Token Sale Agreements for regulatory compliance
• Investors: Individual and institutional buyers purchasing tokens through the agreement's terms
• Compliance Officers: Internal team members ensuring adherence to FICA requirements and FSCA guidelines
• Financial Advisors: Professionals guiding both issuers and investors on token valuations and risk assessments

• Token Details: Document the token's purpose, total supply, distribution method, and technical specifications
• Pricing Structure: Define token price, minimum purchase amounts, and any early-bird or volume discounts
• KYC Requirements: Prepare investor verification procedures that align with FICA regulations
• Risk Disclosures: List potential investment risks and market volatility factors specific to crypto assets
• Sale Timeline: Map out key dates for token launch, distribution phases, and lock-up periods
• Platform Integration: Our system generates compliant agreements automatically, ensuring all these elements are properly structured

• Identification Details: Full legal names and registration details of token issuer and investor parties
• Token Specifications: Detailed description of token rights, functionality, and technical parameters
• Purchase Terms: Clear pricing, payment methods, and token delivery conditions
• FICA Compliance: KYC/AML procedures and verification requirements
• Risk Disclosures: Comprehensive listing of investment risks and regulatory warnings
• Dispute Resolution: South African jurisdiction and arbitration procedures
• Platform Security: Our system automatically includes all these elements in compliance with local regulations

A Token Sale Agreement differs significantly from a Simple Agreement for Future Tokens (SAFT), though both relate to cryptocurrency investments. Let's explore their key differences in the South African context:

• Timing of Token Delivery: Token Sale Agreements involve immediate token transfers upon payment, while SAFTs promise future tokens once the network launches
• Regulatory Treatment: Token Sale Agreements fall under current FSCA crypto-asset regulations, whereas SAFTs often qualify as investment contracts under financial services laws
• Investment Structure: Token Sales provide direct ownership of existing tokens, while SAFTs offer contractual rights to receive tokens later
• Risk Profile: SAFTs carry higher development and delivery risks since the tokens don't exist yet, compared to Token Sales of already-created tokens
• Simple Agreement for Future Tokens: Used primarily for pre-development fundraising, offering investors future rights rather than immediate token ownership