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Simple Agreement for Future Tokens
I need a Simple Agreement for Future Tokens (SAFT) for a blockchain startup that plans to issue tokens in the future, with clear terms on token allocation, vesting schedule, and compliance with Malaysian regulations. The agreement should include provisions for investor rights and a mechanism for dispute resolution.
What is a Simple Agreement for Future Tokens?
A Simple Agreement for Future Tokens (SAFT) lets Malaysian companies raise funds by promising investors future cryptocurrency tokens before launching their blockchain project. It works like a forward contract, giving early backers the right to receive tokens once the network goes live.
Under Malaysian securities laws, SAFTs help structure token sales legally while protecting both startups and investors. The agreement typically outlines key details like token allocation, delivery conditions, and compliance requirements with Bank Negara Malaysia's digital asset guidelines. This approach has become popular among Malaysian blockchain startups seeking capital without immediately issuing tokens.
When should you use a Simple Agreement for Future Tokens?
Use a Simple Agreement for Future Tokens when your Malaysian blockchain startup needs early funding but your token network isn't ready to launch. This agreement helps you secure investment while your project is still in development, without immediately creating and distributing tokens that might trigger securities regulations.
The SAFT structure works especially well for Malaysian companies building decentralized platforms, DeFi projects, or blockchain infrastructure. It provides a clear legal framework that satisfies Bank Negara Malaysia's guidelines while giving investors documented rights to future tokens. This approach reduces regulatory uncertainty and helps maintain compliance throughout your project's development phase.
What are the different types of Simple Agreement for Future Tokens?
- Basic SAFT: Most common version in Malaysia, focusing on token delivery timelines and investment terms
- Series-Based SAFT: Includes multiple funding rounds with different token prices and vesting schedules
- Hybrid SAFT: Combines token rights with traditional equity elements, popular among Malaysian fintech startups
- Project-Specific SAFT: Tailored for specific blockchain use cases like DeFi or NFT platforms
- Regulated SAFT: Enhanced compliance features aligned with Bank Negara Malaysia's digital asset guidelines
Who should typically use a Simple Agreement for Future Tokens?
- Blockchain Startups: Create and issue SAFTs to raise capital during early development stages while building their token networks
- Angel Investors: Provide early-stage funding through SAFTs in exchange for future token rights
- Legal Counsel: Draft and review agreements to ensure compliance with Malaysian securities laws and digital asset regulations
- Venture Capital Firms: Invest in promising blockchain projects using SAFTs as their investment vehicle
- Compliance Officers: Monitor SAFT implementation and ensure adherence to Bank Negara Malaysia's guidelines
How do you write a Simple Agreement for Future Tokens?
- Project Details: Document your token's technical specifications, utility, and planned distribution mechanism
- Investment Terms: Define token price, vesting schedule, and total allocation for SAFT investors
- Compliance Check: Review Bank Negara Malaysia's digital asset guidelines and securities regulations
- Investor Information: Gather KYC details and accreditation status of potential investors
- Development Timeline: Outline clear milestones for token network launch and delivery dates
- Risk Disclosures: List potential project risks and regulatory uncertainties for investor awareness
What should be included in a Simple Agreement for Future Tokens?
- Token Rights: Clear description of future tokens, including quantity, price, and delivery conditions
- Investment Terms: Purchase amount, payment method, and vesting schedule details
- Regulatory Compliance: References to Malaysian securities laws and digital asset regulations
- Project Milestones: Specific network launch targets and token delivery deadlines
- Risk Disclosures: Project risks, regulatory uncertainties, and potential token value fluctuations
- Termination Clauses: Conditions for agreement cancellation and refund procedures
- Governing Law: Explicit statement of Malaysian jurisdiction and dispute resolution methods
What's the difference between a Simple Agreement for Future Tokens and a Simple Agreement for Future Equity?
A Simple Agreement for Future Tokens (SAFT) differs significantly from a Simple Agreement for Future Equity (SAFE) in several key aspects, though both are investment instruments used in Malaysia's startup ecosystem.
- Underlying Asset: SAFTs promise future cryptocurrency tokens, while SAFEs convert to company equity shares
- Regulatory Framework: SAFTs must comply with Bank Negara Malaysia's digital asset guidelines, whereas SAFEs follow traditional securities regulations
- Triggering Events: SAFTs convert upon network launch and token creation, but SAFEs typically convert during equity financing rounds
- Investor Rights: SAFT holders receive utility tokens with no governance rights, while SAFE holders become shareholders with voting potential
- Market Application: SAFTs are specific to blockchain projects, but SAFEs work for any startup seeking early-stage funding
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