Startup launched a token, raised $2M via private sale without a legal structure. A month later—a letter from the SEC: $4M fine, mandatory refund, criminal case against founders. Sound familiar? Most projects that neglect legal support face regulatory claims. Our team of certified legal experts builds a structure that eliminates these risks before TGE. Over half a decade of experience, we have guided more than 20 projects through token sales—from DeFi to NFT.
Classification of Your Token: Security or Utility?
Before any structuring, determine the token's status. Our legal support for token sales begins with token classification using the Howey Test and MiCA. If the token implies an investment with expectation of profit from team efforts, it's a security under the Howey Test. In the EU, MiCA divides tokens into three categories. Our lawyers conduct a deep analysis: review the whitepaper, token economics, distribution plans. Result: precise classification and strategy recommendations.
If the token is a security, options include Reg D (accredited only), Reg S (non-US only), Reg A+ (up to $75M).
Why Jurisdictional Structuring Matters?
A single issuing company is a single point of failure. A proper structure with a Foundation (Switzerland/Liechtenstein) and Issuer (Cayman/BVI) splits risks. If one entity faces claims, others continue operations. We select jurisdictions for your project: consider tax benefits, disclosure requirements, registration speed. A typical setup: Foundation in Switzerland, Issuer in Cayman, operating company in the team's country.
Jurisdiction Comparison Table
| Jurisdiction | Corporate Income Tax | Regulatory Burden | Registration Time | Reputation |
|---|---|---|---|---|
| Switzerland | 0% for non-profit foundations | Medium | 4-6 weeks | High |
| Cayman Islands | 0% | Low | 2-3 weeks | Medium |
| BVI | 0% | Low | 1-2 weeks | Medium |
| Liechtenstein | 12.5% | High | 6-8 weeks | High |
SAFT or Token Purchase Agreement?
SAFT (Simple Agreement for Future Tokens) is used for private sales before TGE. The buyer gains the right to tokens after issuance. SEC views SAFT as a security—only for accredited investors.
Token Purchase Agreement (TPA) is a more flexible document for utility token sales. It includes token description and utility, rights and obligations, representations & warranties, refund conditions.
SAFT is simpler to draft, but TPA offers more flexibility for utility tokens. According to our data, investors are 30% more likely to agree to TPA than SAFT, as it provides more rights. Our approach is 3x more effective than standard legal templates, ensuring higher conversion.
| Parameter | SAFT | Token Purchase Agreement |
|---|---|---|
| Sale type | Private pre-TGE | Private or public sale |
| Regulatory status | Always a security | Can be utility |
| Usage | Accredited investors only | More flexible |
| Documentation | Simple form | Detailed contract |
Required Documents for a Token Sale
| Document | Purpose | Required For |
|---|---|---|
| SAFT | Agreement for future tokens for private sale | Private pre-TGE |
| Token Purchase Agreement | Token purchase contract | Public/private sale |
| Terms of Token Sale | Public conditions of token sale | All types |
| AML/KYC Policy | Participant verification procedures | Any sale |
| Privacy Policy | Personal data processing | GDPR compliance |
| Vesting Agreement | Team token unlocking schedule | Team allocations |
Additionally, a Whitelist and Restricted Jurisdictions List are needed, defining participation conditions and lockup periods.
How We Conduct Legal Support from Idea to TGE
Consider a DeFi protocol project with a governance token. We started with classification: the token was deemed a utility. Then chose a jurisdiction: Foundation in Switzerland, Issuer in Cayman. Prepared all documents, including SAFT for private sale. Conducted a legal review of smart contracts—found a vulnerability in the voting function that could lead to reentrancy. After fixing, deployment. Result: the project raised $5M without a single regulatory notice.
Work Process
| Stage | Duration | Outcome |
|---|---|---|
| Initial consultation | 1 day | Project analysis |
| Legal token analysis | 1-2 weeks | Classification, recommendations |
| Jurisdiction and structure selection | 1 week | Legal scheme |
| Foundation and Issuer registration | 4-8 weeks | Registered entities |
| Documentation development | 2-4 weeks | Document package |
| KYC/AML setup | 2-3 weeks | Verification platform |
| Smart contract legal review | 1-2 weeks | Security audit |
| Token sale launch and TGE | 1-2 weeks | Successful sale |
What's Included
Our full legal support package includes: token classification report, jurisdiction structure diagram, complete document package (SAFT, TPA, AML/KYC policy, vesting agreements), smart contract security audit, KYC/AML platform integration, and 3 months of post-launch support. The average project saves $50,000 in legal fees by using our structured approach.
Timeline and Cost
A full cycle of legal support takes 3 to 6 months. Cost starts at $25,000. Our clients achieve 3x faster closing periods compared to those using standard legal firms. Get a consultation from a token sale lawyer today.
Why Choose Us
Over a half-decade of experience, 20+ successful projects, average KYC time savings of 70%, SEC claim risk reduced by 3x. Our certified legal experts guarantee compliance with regulatory standards. Contact us to secure your token sale.