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A Token Sale Agreement sets out the legal terms when a company sells digital tokens or cryptocurrencies to investors in India. It covers essential details like token price, sale timeline, investor rights, and compliance with SEBI regulations and the proposed Virtual Digital Assets framework.

Much like a traditional share purchase agreement, this contract protects both the token issuer and buyers by clearly defining payment terms, token delivery methods, and usage limitations. It also includes key safeguards against money laundering and follows RBI guidelines on virtual currencies, making it a crucial document for blockchain startups raising funds.

Use a Token Sale Agreement when launching a cryptocurrency or digital token offering in India, especially before accepting any investor funds. This document becomes essential during fundraising rounds, ICOs, or when creating security tokens that fall under SEBI's regulatory scope.

The agreement proves particularly valuable for blockchain startups seeking to document compliance with RBI guidelines and anti-money laundering regulations. It's also crucial when offering tokens to qualified institutional buyers or planning a public token sale, as it establishes clear terms for token distribution, vesting schedules, and investor rights.

• Token Sale Agreements in India typically come in three main forms: Private Sale Agreements for select institutional investors with customized terms, Public Sale Agreements for retail token offerings with standardized terms and stronger consumer protections, and SAFT (Simple Agreement for Future Tokens) variants that comply with Indian securities laws and accommodate future token delivery.
• Each type can include specialized clauses for different token utilities, vesting schedules, and governance rights. Some focus on security tokens under SEBI oversight, while others target utility tokens with specific use cases in decentralized applications.

• Token Issuers: Blockchain startups, tech companies, and established firms launching cryptocurrencies or digital assets use Token Sale Agreements to structure their offerings and protect their interests.
• Investors: Both institutional buyers and retail participants who purchase tokens, requiring clear terms about their rights, token delivery, and usage limitations.
• Legal Counsel: Corporate lawyers and fintech specialists who draft and review these agreements to ensure compliance with SEBI guidelines and RBI regulations.
• Compliance Officers: Internal teams who monitor adherence to KYC requirements and anti-money laundering protocols specified in the agreement.

• Token Details: Document the token's technical specifications, total supply, pricing structure, and intended utility within your platform or ecosystem.
• Compliance Framework: Gather your KYC/AML procedures, SEBI compliance documentation, and RBI guidelines alignment proof.
• Sale Structure: Define private/public sale phases, vesting schedules, lock-up periods, and minimum/maximum investment limits.
• Risk Disclosures: List potential investment risks, regulatory uncertainties, and market volatility factors.
• Platform Usage: Our system generates legally-sound Token Sale Agreements customized to your specific needs, ensuring all essential elements are properly included.

• Token Description: Detailed specifications of the digital asset, including technical features, total supply, and intended utility.
• Sale Terms: Price per token, payment methods, minimum/maximum purchase limits, and distribution timeline.
• Investor Rights: Voting privileges, profit-sharing mechanisms, and token holder governance participation.
• Compliance Declarations: SEBI and RBI compliance statements, KYC/AML requirements, and tax implications.
• Risk Factors: Market volatility warnings, regulatory uncertainty disclaimers, and project-specific risks.
• Dispute Resolution: Indian jurisdiction choice, arbitration procedures, and governing law provisions.

A Token Sale Agreement differs significantly from a Simple Agreement for Future Tokens (SAFT), though both are used in cryptocurrency fundraising. The key distinctions lie in their timing, structure, and regulatory implications under Indian law.

• Delivery Timing: Token Sale Agreements handle immediate token transfers, while SAFTs promise future token delivery once the network launches.
• Regulatory Treatment: Token Sale Agreements typically involve existing tokens and fall under current SEBI frameworks, whereas SAFTs often qualify as investment contracts under securities regulations.
• Investment Structure: Token Sales provide direct ownership of tokens, while SAFTs offer a contractual right to receive tokens in the future.
• Risk Profile: SAFTs carry higher uncertainty as they depend on successful project completion, while Token Sales involve immediate transfer of existing assets.