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A Token Sale Agreement sets out the legal terms when companies sell digital tokens or cryptocurrency to investors under German securities law. It's a binding contract that details how many tokens buyers will receive, what they're paying, and when the transfer happens.

These agreements help protect both sides by clarifying token rights, listing any restrictions on resale, and meeting BaFin's regulatory requirements. For German blockchain projects, they're especially important since they document compliance with the Electronic Securities Act (eWpG) and establish clear ownership rights in line with German civil law.

Use a Token Sale Agreement when launching a token offering or cryptocurrency project in Germany, particularly before accepting any investment funds. This agreement becomes essential for blockchain startups raising capital through token sales, ICOs, or security token offerings under BaFin oversight.

The timing is crucial - implement it before any marketing or pre-sale activities begin. German companies need this agreement to demonstrate regulatory compliance, protect investor rights, and establish clear token distribution terms. It's especially important when dealing with qualified investors, planning multiple sale rounds, or offering tokens with specific utility or security features.

• Public Token Sale Agreements: Used for broad token offerings to retail investors, featuring detailed KYC requirements and investment caps per BaFin guidelines
• Private Placement Token Agreements: Tailored for qualified investors and institutional buyers, with fewer restrictions but higher minimum investment thresholds
• Utility Token Sale Agreements: Focus on tokens granting access to specific platform services or features, emphasizing non-security characteristics
• Security Token Sale Agreements: Structured for tokens representing financial instruments under German securities law, with strict regulatory compliance measures
• Pre-Sale Token Agreements: Designed for early-stage offerings with special terms, discounts, and vesting schedules for early supporters

• Token Issuers: German blockchain companies or startups raising capital through token sales, responsible for drafting and executing the agreements
• Legal Counsel: Specialized crypto lawyers who ensure compliance with BaFin regulations and draft agreement terms
• Token Purchasers: Individual or institutional investors buying tokens under the agreement's terms
• Compliance Officers: Internal team members managing KYC/AML procedures and regulatory requirements
• Financial Intermediaries: Banks or custody service providers handling token distributions and payment processing

• Token Details: Document the token's technical specifications, total supply, and intended functionality
• Sale Structure: Define pricing tiers, minimum/maximum purchase limits, and vesting schedules
• Compliance Framework: Gather BaFin requirements, KYC/AML procedures, and relevant securities regulations
• Platform Documentation: Prepare technical whitepaper, smart contract audit reports, and security measures
• Investor Rights: Specify token holder privileges, voting rights, and any profit-sharing mechanisms
• Risk Disclosure: List potential technical, regulatory, and market risks for investor awareness

• Party Identification: Full legal names and addresses of token issuer and purchaser
• Token Description: Detailed specifications, rights, and technical characteristics per eWpG requirements
• Purchase Terms: Price, payment method, delivery timeline, and minimum investment amounts
• KYC Requirements: Identity verification procedures aligned with German AML laws
• Risk Disclosures: Comprehensive list of investment risks and regulatory warnings
• Governing Law: Clear statement of German law application and jurisdiction
• Transfer Restrictions: Resale limitations and lock-up periods under BaFin guidelines

A Token Sale Agreement differs significantly from a Simple Agreement for Future Tokens (SAFT), though both are used in cryptocurrency fundraising. The key distinctions reflect important legal and practical considerations under German securities law.

• Timing of Token Delivery: Token Sale Agreements govern immediate token transfers, while SAFTs promise future token delivery once the network launches
• Regulatory Treatment: Token Sale Agreements typically handle existing, functional tokens under current BaFin guidelines, whereas SAFTs are investment contracts for tokens that don't yet exist
• Risk Profile: SAFTs carry higher development and completion risks since the token network isn't operational, while Token Sale Agreements deal with established tokens
• Investor Rights: Token Sale Agreements provide immediate token ownership rights, but SAFTs only offer contractual rights to future tokens
• Simple Agreement for Future Tokens: Better suited for early-stage projects still developing their token infrastructure