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A Token Sale Agreement sets out the terms when companies sell digital tokens or cryptocurrencies to investors in Nigeria. This legal contract spells out key details like token pricing, purchase limits, and delivery timelines while following Securities and Exchange Commission (SEC) guidelines on digital assets.

The agreement protects both token issuers and buyers by clearly defining rights, responsibilities, and what happens if things go wrong. It must include anti-money laundering checks and investor verification steps required by Nigerian financial regulations. Companies often use these agreements during Initial Coin Offerings (ICOs) or Security Token Offerings (STOs) to raise funds legally.

Use a Token Sale Agreement when launching a digital token or cryptocurrency offering in Nigeria to raise funds from investors. This document becomes essential before any Initial Coin Offering (ICO), token pre-sale, or when selling utility tokens to early adopters. The SEC requires proper documentation for all digital asset sales.

Companies preparing for blockchain-based fundraising need this agreement to meet regulatory requirements and protect all parties involved. It's particularly important when dealing with international investors, managing large token distributions, or offering unique token features like staking rewards or governance rights. Nigerian fintech startups often need these agreements during their seed or Series A funding rounds.

• Basic Token Sale Agreement: Covers standard token distributions with straightforward purchase terms and delivery schedules
• Security Token Agreement: Includes additional SEC compliance measures and investor accreditation requirements for tokens classified as securities
• Utility Token Agreement: Focuses on tokens with specific platform usage rights, with detailed functionality descriptions
• SAFT-Based Agreement: Adapts the Simple Agreement for Future Tokens model to Nigerian regulations
• Hybrid Token Agreement: Combines multiple token features and uses, with flexible terms for different investor categories

• Token Issuers: Tech startups, blockchain companies, or established businesses creating and selling digital tokens
• Legal Counsel: Corporate lawyers specializing in fintech who draft and review Token Sale Agreements to ensure SEC compliance
• Investors: Individual and institutional buyers purchasing tokens, including venture capitalists and crypto investment firms
• Compliance Officers: Internal team members ensuring adherence to Nigerian anti-money laundering and securities regulations
• Financial Regulators: SEC officials who review and enforce token sale requirements and investor protection measures

• Token Details: Document token type, total supply, price, and distribution schedule
• Company Information: Gather corporate registration, director details, and SEC registration status
• Investor Requirements: Define eligibility criteria, minimum investment amounts, and KYC procedures
• Technical Specifications: Detail blockchain platform, smart contract features, and token functionality
• Risk Disclosures: List potential investment risks, regulatory uncertainties, and market volatility factors
• Compliance Checks: Verify alignment with Nigerian SEC guidelines and anti-money laundering requirements

• Token Definition: Clear description of token type, rights, and functionalities under SEC guidelines
• Sale Terms: Purchase price, minimum/maximum investment amounts, and payment methods
• Distribution Schedule: Token release timeline, vesting periods, and lockup requirements
• Investor Rights: Voting privileges, profit sharing, and redemption procedures
• KYC Requirements: Identity verification and anti-money laundering compliance procedures
• Risk Disclosures: Market, technical, and regulatory risk warnings
• Dispute Resolution: Nigerian jurisdiction clause and arbitration procedures

A Token Sale Agreement differs significantly from a Simple Agreement for Future Tokens (SAFT) in several key aspects, though both are used in cryptocurrency fundraising. Here are the main distinctions:

• Timing of Token Delivery: Token Sale Agreements involve immediate token transfers upon payment, while SAFTs promise future token delivery once the network launches
• Regulatory Treatment: SAFTs are typically considered investment contracts under Nigerian SEC rules, while Token Sale Agreements can cover both security and utility tokens
• Risk Profile: SAFTs carry higher risk as they're for pre-development projects, while Token Sale Agreements often involve existing tokens
• Investor Rights: SAFTs include conversion rights and special protections for early investors, whereas Token Sale Agreements focus on immediate ownership terms
• Legal Structure: SAFTs function as convertible instruments, while Token Sale Agreements operate as direct purchase contracts