A crypto project that uses an offshore structure in 2026 usually needs more than one legal person. The common model separates a foundation, which holds protocol assets and gives legal effect to community decisions, from a company that raises equity and runs commercial products. Further entities may operate the user interface or provide licensed virtual-asset services. The place of incorporation decides which company law and which home regulator apply. The securities, payment, promotion and tax rules of the countries where investors, users, founders and managers are located continue to apply alongside them.
The comparison below covers thirteen offshore jurisdictions: the Cayman Islands, the British Virgin Islands (BVI), the Marshall Islands (RMI), Panama, the Cook Islands, Nevis, Jersey, Mauritius, Abu Dhabi Global Market (ADGM), the Bahamas, Bermuda, Seychelles and Guernsey. The law is stated as at 23 September 2026. It also refers to United States, European Union and United Kingdom rules where they reach offshore issuers.
Main points
- The allocation of functions should come before the choice of jurisdiction. The first record to prepare identifies who holds protocol assets, who receives investment, who operates the interface, who controls payment and upgrade keys and who issues the token.
- A foundation suits protocol stewardship and treasury management. Foundation law in the main jurisdictions restricts distributions to members, so venture investors should hold shares in a company.
- Community voting has legal effect only through the foundation's constitution. The documents must identify the electorate, the matters put to a vote, the persons who implement a vote and the grounds on which directors may refuse an unlawful instruction.
- Panama, the Cook Islands and Jersey restrict direct commercial trading by a foundation. Nevis and Mauritius permit commercial objects, and Mauritius and ADGM still require regulated crypto business to sit in a company or an authorised firm.
- The virtual-asset laws of most jurisdictions reviewed reach custody, transfer and exchange carried on for others, and several also reach token issuance. Receiving crypto as the price of the entity's own service is treated differently from handling other people's assets.
- Beneficial ownership rules cover memberless foundations, economic substance rules apply to holding and intellectual property (IP) entities, and several former tax exemptions have been removed.
- Token offerings are tested under the law of the countries where investors and users are located. The SEC's March 2026 interpretation, the EU Markets in Crypto-Assets Regulation (MiCA) and the UK promotion regime each apply on their own territorial tests.
Functions to allocate
Most offshore crypto structures distribute six functions among one or more entities:
- protocol stewardship: holding the treasury, trademarks, domains or other protocol rights, funding development and implementing community decisions;
- commercial development: employing developers, owning proprietary products and raising equity;
- interface operation: running the website or application, contracting with users and receiving legal notices;
- virtual-asset services for others: custody, transfer, exchange or services connected with a token sale;
- token issuance: creating, selling or distributing the token and making the statements that accompany the offer;
- control of code: deploying contracts, holding upgrade, pause, fee-setting or freeze powers, supplying oracle data and signing dispute outcomes.
A single company can perform several of these functions where the project is small and sells only its own services. Separate entities become useful when different investors, regulators or liabilities attach to different functions. The separation has legal effect only if assets, contracts and control follow the chart. A foundation that keeps the payment and upgrade keys remains exposed for those functions even where a subsidiary registers the domain and signs the user terms.
The label "non-custodial" does not settle the analysis. The Cayman and BVI virtual-asset definitions and FinCEN's 2019 guidance look at the person who can release, redirect, refund, freeze or upgrade the disposition of other people's assets. The record that answers this question maps every relevant power. It covers the deployer, proxy administrator, fee setter, pause or blacklist powers, oracle, dispute signer, relayer and each route by which funds can be redirected. Forming an entity before that map exists risks choosing a vehicle that cannot lawfully perform its intended role.
Several statutes draw a line between receiving payment for the entity's own service and moving other people's assets. The BVI Virtual Assets Service Providers Act 2022 expressly excludes the acceptance of virtual assets as payment for goods or services (s 2(2)(g)). The Cayman, Nevis and RMI definitions concentrate on services carried on for or on behalf of another person. In the United States, FinCEN's 2019 guidance draws a comparable line between users of virtual currency and money transmitters. A project that collects the full price of a third party's sale and later pays that third party performs a different activity from one that receives only its own fee.
Three foundation and company configurations
The foundation and company model has three common variants. Each gives investors different rights and places control differently.
In configuration A, the foundation owns a commercial company, and investors take a minority stake in that company. The foundation holds the controlling stake and any protocol assets actually transferred to it, and the company is a separate commercial entity. Investors receive preference shares with negotiated governance, information, liquidation and exit rights, and the company may pay lawful dividends to the foundation and to outside investors. The main constraint is that a grant to the company also benefits its private shareholders, so grant purpose, pricing and conflicts need controls. Foundation control may limit a sale, an exclusive IP licence or an investor veto.
In configuration B, an independent foundation sits alongside a separate development company owned by founders and investors. There is no common parent. The company owns its own assets and contracts, and the foundation owns the treasury and protocol rights vested in it. Investors receive shares in the development company and, where separately agreed with the actual issuer, token rights or service revenue. The main constraint is that the shares carry less value where the valuable IP and income sit in the foundation and the company has no durable contract or product of its own.
In configuration C, an investor-owned holding company owns development and interface subsidiaries, and an independent foundation serves the protocol. Investors hold a conventional equity group; the foundation stays outside it and is linked by licences and service agreements. Investors receive equity returns from the subsidiaries, and token allocations arise only through instruments that bind the actual issuer. The main constraints are more entities to administer and more substance questions. Each entity remains answerable for its own activities, including any payment or upgrade control.
The investor documents should separate protections over the company from powers over the protocol. A veto over new shares, related-party transactions or the sale of company assets protects the investment. A veto over protocol upgrades, community grants or independent interfaces puts the foundation's claimed independence in doubt. A foundation that can end all company income by vote creates a risk that the company should disclose to its investors and reflect in its valuation.
IP should be allocated before grants or investment. A foundation can own trademarks, domains or designated protocol rights and license them to the company on stated termination terms. Code already released under a permissive open-source licence cannot regain exclusivity because a later investor asks for it. The arrangements should also cover repository access, documentation, maintenance, security response and handover if a contractor fails.
A discretionary grant and a negotiated services agreement give investors different things. A company that can only apply for future grants has an opportunity to win work. A company holding a multi-year services agreement with notice periods and payment protection has contractual revenue that investors can value. Grant documents should state the funded work, permitted expenditure, milestones, reporting, termination, recovery and ownership of resulting IP. They should also say who approves a grant where founders or directors sit on both sides.
The foundation
Cayman foundation company
Several large networks use a Cayman foundation company as their steward. Its statute explains both the appeal of the vehicle and its limits.
The Foundation Companies Act (2025 Revision) requires the constitution to prohibit dividends and other distributions of profits or assets to members as such (s 4(1)(b)(iv)). Section 4(2) preserves benefits received as a beneficiary, reasonable remuneration, reimbursement and arm's-length transactions. A Cayman foundation therefore need not be charitable. It remains unsuited to act as a dividend-paying parent for venture investors, and a purchaser of a governance token acquires no share in it and no claim to its treasury.
A foundation may cease to have members if its memorandum permits and at least one supervisor remains (s 8). The Beneficial Ownership Transparency Act (2026 Revision) expressly covers foundations, so memberless status gives no anonymity. Founder reserved powers, concentrated token voting, appointment rights and upgrade control are all relevant to identifying beneficial owners.
Section 7 allows rights over appointments, removals, supervision, constitutional change and voting to be conferred on founders, members, directors, supervisors or other persons. Section 8(1) permits enforceable rights to become a member or supervisor to be granted to classes of persons, including persons not yet ascertained. Section 7(5) allows the memorandum to impose an enforceable duty to carry out the objects and to name the persons who may enforce it. Without that express provision, a statement that the foundation is accountable to its community gives the community no right of enforcement.
The same statute limits what a vote can achieve. By default, constitutional duties are owed to the foundation itself (s 7(4)). Compliance with bylaws is required only so far as it is consistent with the constitution and the law and the foundation can meet the liabilities that compliance creates (s 12(2)). Section 15 prohibits a disposition of assets that leaves the foundation unable to pay its debts as they fall due. A token vote therefore cannot be drafted as an unconditional instruction to make an unlawful payment or to destroy assets needed for liabilities. The optional model articles in Schedule 2 retain extensive founder powers, which a project promising community control should revise.
The foundation needs a qualified secretary and a registered office (ss 13 and 16). Section 17(1)(b) requires the secretary's prior no-objection before the foundation accepts a gratuitous asset contribution or an asset contribution in return for issued shares. Donated tokens and initial treasury transfers therefore need an acceptance procedure. A contract that automatically accepts every inbound transfer does not provide one.
A later change of direction is possible. The Companies Act (2026 Revision) s 233B allows a foundation company to re-register as an exempted company through a special resolution, a replacement constitution and registration. The entity continues with its existing property and liabilities. This route supports a deliberate restructuring. It gives no basis for promising investors foundation returns at formation, and it requires attention to existing community and beneficiary rights.
Published documents show the pattern in practice. The Arbitrum Foundation's bylaws describe a Cayman foundation whose DAO holds appointment and reserved-matter powers, while its directors may reject actions inconsistent with law, contracts or their fiduciary duties. The Optimism Foundation and the Sui Foundation are also Cayman foundations, and the principal development companies behind those networks (OP Labs and Mysten Labs) raised venture capital as separate companies. Each project's actual powers depend on its own constitutional documents.
Other foundation laws
Panama's Law 25 of 1995 prohibits profit-seeking purposes. A Panamanian foundation may hold shares and exercise share rights if the returns serve its objects, and may carry on commercial activities only on a non-habitual basis (art 3). Its council has at least three members unless the council is a legal person (art 17). Protectors and supervisory bodies are available (arts 19 and 24), and founder powers may be delegated to third parties (art 5, as amended by Law 131 of 2013). Panama is better suited to a holding or purpose foundation than to a recurring operator.
The Cook Islands Foundations Act 2012 prohibits direct commercial trading that is not incidental to the objects (s 35(3)). The foundation rules define decision-making (s 11), an enforcer may be appointed (s 13), and powers may be reserved or assigned (ss 18 and 28). A council is required (s 22), with duties of lawful administration, good faith and prudent care (s 24), and a Cook Islands trustee company acts as registered agent (s 27).
The Nevis Multiform Foundations Ordinance expressly permits commercial or non-commercial purposes (s 11(2)) and requires no beneficiary (s 11(3)). Individual acts must be ancillary or incidental to the stated purposes (s 23(3)). A management board with good-faith and care duties manages the foundation (ss 23 and 26). Licensing requirements under other law continue to apply (s 24(2)). The memorandum states the foundation's multiform (s 7(1)(f)), which decides the default law for its by-laws; for a company foundation that is the Nevis Business Corporation Ordinance (s 10(9)(b)).
The Foundations (Jersey) Law 2009 restricts direct trading that is not incidental to the objects (art 30(3)(b)). A guardian (art 13) and a qualified council member (art 23) are required. Jersey offers no particular advantage for recurring commercial activity.
The Mauritius Foundations Act 2012 gives the foundation full capacity to carry on business (s 31). The charter may reserve founder powers, and the council must include at least one ordinarily resident member. Virtual-asset service and initial token offering business is restricted to companies (VAITOS 2021, ss 8(1) and 24(1)).
For ADGM foundations under the DLT Foundations Regulations 2023, Registration Authority guidance lists grants, token issuance, development and holding the foundation's own virtual assets as permitted activities. The charter may allocate decisions to tokenholders, and the council has at least two councillors. The foundation may not carry on activities requiring a financial-services permission (s 4(4)). Since May 2026 foundations cannot be established for purposes within the definition of a non-profit organisation in ADGM's AML rules. Initial assets of US$50,000 are required.
Where a foundation law restricts direct trading, recurring commercial activity is better placed in a separate company. A fee-bearing business does not become incidental to the objects because its profits fund development. Where the law permits commercial objects, the licensing rules for the activity still decide whether the foundation can carry it on.
Among the foundation laws compared here, ADGM's DLT foundation regime expressly connects the charter, tokenholder decisions and the operation of distributed-ledger technology. Tokenholders are beneficiaries only if the charter says so, and beneficiaries have rights to assets on termination. The charter should therefore state a governance token's voting role, beneficiary status and economic entitlements, so that holding the token does not carry an unintended claim on liquidation. Councillors must act within the charter, for proper purposes and in good faith, and a token vote does not release them from those duties. UAE free zone status confers no automatic corporate tax exemption, because qualifying free zone treatment depends on statutory conditions.
DAO legal entities
The Marshall Islands DAO LLC is a resident domestic limited liability company that elects DAO status under the DAO Act 2022, as amended in 2023. It is a different vehicle from the ordinary non-resident RMI corporation.
A for-profit DAO LLC can give members economic rights and use classes with different rights. A nonprofit DAO's membership interest is a governance right without ownership or financial rights (s 702(i)). Its purpose must satisfy the Non-Profit Entities Act, whose list of permitted activities excepts carrying on a business, trade or profession for profit (s 208(2)).
The certificate of formation or LLC agreement prevails over a conflicting smart contract (s 715(1)). Smart contracts used to manage the DAO, including treasury contracts, must have a publicly available identifier (s 706; 2024 Regulations, reg 12). The Registrar may order dissolution if the DAO is no longer under the control of at least one natural person (s 714(1)(d)). Members' fiduciary duties are removed by default, except the implied covenant of good faith and fair dealing (s 709), and investors may wish to restore them by agreement.
Administration remains substantial. Formation and annual beneficial-owner reports include identity, address, passport number and DAO-associated wallets (s 712). The DAO Act permits a compliant virtual-asset service provider (VASP) and exempts none (s 715(2)). An RMI entity carrying on VASP business must be a licensed financial services provider under the Banking Act (s 123(2)). A non-resident domestic corporation may not operate as a VASP at all (Business Corporations Act, s 3(5)).
The RMI tax position changes on 1 October 2026. The Net Profit Tax Act 2025 applies to tax years starting on or after that date and sets a general rate of 16% of taxable net income. Its gross-revenue alternative requires business solely in the RMI, no consumption tax registration and annual gross revenue below US$300,000. The Consumption Tax Act 2025 applies to supplies made on or after the same date.
The Bahamas added a second statutory route in 2026. Its Decentralised Autonomous Organisations Act 2026 requires an existing exempted limited liability partnership, purpose trust or licensed SMART Fund before registration (s 4). The registered DAO has personality separate from its tokenholders (s 5(3)). The Act requires open-source, permissionless operation and decentralisation controls (ss 6, 9 and 11) and retains an accountable responsible person (ss 12 and 13). Governance tokens remain subject to classification under the Digital Assets and Registered Exchanges Act 2024 (s 14(3)).
The commercial company
The BVI business company and the Cayman exempted company are the usual vehicles for equity investment.
The BVI Business Companies Act sets default voting, dividend and surplus rights and allows authorised classes to vary them (s 34). It permits preference, redemption, conversion and limited or conditional voting rights (s 36), allows directors to issue shares and grant options (s 45) and accepts property, know-how or services as consideration (s 47). These rules support a preferred-share financing and an employee option pool. Whether a particular fund can invest in the domicile depends on its own mandate, tax position and fund documents.
Several protections apply only if the constitution adopts them. The statutory pre-emption rights in s 46 apply only where the memorandum or articles provide for them. Board appointment rights and class consents for a sale or licence of core IP, further token grants or related-party arrangements need express drafting. A member may apply for relief against oppressive or unfairly prejudicial conduct (s 184I). That remedy gives no rights over assets that belong to a separate foundation.
Directors' duties limit foundation control of a partly investor-owned company. Directors of a wholly owned subsidiary may act in the parent's interests only if the constitution expressly permits it (s 120(2)). Once outside shareholders enter, s 120(3) also requires their prior agreement. Directors with interests on both sides must disclose them (s 124(1)).
A Cayman exempted company limited by shares can also create preferred classes (Companies Act (2026 Revision), ss 20 and 25). Its general capacity under s 27(2) supports convertible loans, options and warrants, provided the conversion terms, authorised shares and approvals match. Transfers of its shares must pass through the company's books (s 166). A freely transferable token is therefore not a completed share transfer unless register machinery reflects it. Section 175 restricts public invitations in Cayman to subscribe for an unlisted exempted company's securities.
A token warrant or simple agreement for future tokens (SAFT) must bind the entity that will issue the token. An instrument signed by a development company does not bind an independent foundation because both use the same brand. Three financing designs are coherent: equity only; equity with a separately classified and deliverable token right; or a token investment made under an identified securities exemption. Mysten Labs' 2023 announcement of a repurchase from a former investor, which covered both an equity stake and separate warrant rights to purchase SUI tokens, shows the two instruments recorded separately. A token that represents or converts into shares or other listed investments can fall within the BVI or Cayman securities legislation (BVI SIBA, Schedule 1; Cayman SIBA, Schedule 1, para 14).
Founders often act before any entity exists. In the BVI, a person who signs a written contract for a proposed company is personally bound unless the contract provides otherwise or the company later adopts it. Adoption binds the company and releases the signatory (BCA, s 104). Cayman's Companies Act s 81(2) and (3) provides a comparable personal liability rule and a ratification route after registration. Neither rule transfers contracts entered into for a different, pre-existing business. Rights in code, domains, designs and accounts need written assignment from the actual rights holders, because payment of a contractor's invoice is weak evidence that copyright passed.
Regulated activity and the home regulator
The need for a licence follows the activity, whatever corporate form carries it on. Cayman, the BVI, the RMI, Nevis, Mauritius, Seychelles, Bermuda, the Bahamas and Guernsey license or register virtual-asset businesses. The Cook Islands applies its anti-money laundering (AML) law to virtual-currency business. Panama has no dedicated regime, and its securities regulator has addressed one non-custodial model by opinion.
The Cayman Virtual Asset (Service Providers) Act covers virtual-asset issuance and specified services carried on for or on behalf of others. Those services are exchange between virtual assets and fiat currency, exchange between virtual assets, transfer, custody and financial services connected with an issuer's sale. Since 1 April 2025, custody services and qualifying trading platforms require a licence, and other covered services require registration. The Virtual Asset (Service Providers) (Amendment) Act 2026, passed in March 2026, defines issuance as the public sale of newly created virtual assets in or from Cayman, with exclusions for specified non-transferable service tokens and regulated fund interests. Its commencement should be confirmed before a Cayman issuance relies on that definition. Section 9(3)(aa) of the principal Act, inserted by the 2024 amendment, requires at least three directors, one of them independent.
The 2024 amendment identifies the operator of a virtual-asset trading platform in order of priority. The first candidate is the person with management or control, then the entity through which the platform operates and contracts with clients, then the persons providing its services. A domain registered by an interface subsidiary does not make that subsidiary the only operator where foundation personnel keep the payment and upgrade powers. For a covered VASP, the AML Regulations require customer due diligence on each one-off transaction and travel-rule information for transfers (regs 11(2) and 49C to 49H). For CIMA-registered and licensed firms, CIMA's AML compliance and sanctions Rules took effect on 18 September 2026.
A regulated entity must be able to act on these duties. A design in which no responsible person can refuse a prohibited transfer, keep required information or respond to a lawful order is incompatible with them. Funds can move on-chain without identity data being published on-chain, and the two obligations are assessed separately.
The BVI VASP Act 2022 prohibits unregistered VASP business in or from the BVI (s 5). It deems a BVI company that carries on such services abroad to carry them on from within the BVI (s 5(4)). Software development, the creation or sale of an application and network operation can fall outside VASP activity (s 2(2)(b) to (e)). The ancillary-service and network exclusions are limited where the person engages in or actively facilitates the covered business. A company that writes and publishes code is in a different position from one that runs the website, signs upgrades, routes payments or controls refunds.
In Seychelles, the VASP Act 2024 requires a licence for VASP business in or from Seychelles (s 5) and registration of initial coin and NFT offerings (s 27). Eligible applicants are specified companies, and foundations are not listed. A resident director, a staffed local office and local board meetings are required (s 7 and Third Schedule).
In Bermuda, the Digital Asset Business Act 2018 covers payment services, exchanges (including decentralised exchanges) and custody, and the Digital Asset Issuance Act 2020 covers public offerings. DABA requires a Bermuda head office and actual direction and management in Bermuda (s 21). Offers calculated not to reach more than 150 persons, and offers to qualified acquirers, fall outside the public-offer definition but need a placement declaration (DAIA, s 5).
In the Bahamas, the Digital Assets and Registered Exchanges Act 2024 requires registration of digital-asset business in or from the Bahamas (s 7). Developing and disseminating software is not in itself a digital-asset activity (s 6(3)). Offering memorandum exceptions include offers to fewer than 150 persons and to qualified purchasers (s 36).
In Mauritius, the Virtual Asset and Initial Token Offering Services Act 2021 (VAITOS) requires VASP licensing (s 7) and initial token offering registration (s 23), both restricted to companies. A licensee needs a physical office, direction and management in Mauritius and an approved resident senior executive. Minimum capital under the 2022 Rules is MUR 2 million for broker-dealers, MUR 5 million for custodians and MUR 6.5 million for marketplaces. Token purchasers have a 72-hour withdrawal right. Amendments passed in August 2026 insert s 34A, which prohibits unlicensed solicitation of Mauritius investors.
In Nevis, the Virtual Asset Act 2020, amended in 2021, 2024 and 2026, applies together with 2026 business regulations. Registrants hold escrow assets equal to 15% of client funds (s 9A(1)). The 2026 regulations require a business plan, capital and liquidity and client-asset safeguards.
In Guernsey, the Lending, Credit and Finance Rules 2023 limit VASP services to institutional and wholesale counterparties until 1 October 2026, when an amendment removes that restriction.
In the Cook Islands, the Financial Transactions Reporting Act 2017 covers issuance, transfer, custody and exchange of virtual currency, so AML duties apply without a standalone VASP statute. The 2024 amendment requires identification of founders, board members and other ultimate controllers of foundations.
In Panama, the Securities Market Superintendency (SMV) found in Opinion 4-2025 that a specific non-custodial interface for BTC and ETH needed no SMV licence. The opinion is confined to its facts and to the SMV's competence, and grants no AML, banking, payments or tax exemption.
Substance, ownership and tax
Economic substance rules apply according to the entity's activity. Under the Cayman International Tax Co-operation (Economic Substance) Act (2026 Revision), a pure equity holding entity, which only holds equity participations and earns only dividends and capital gains, meets a reduced test (s 4(5)). An entity that also receives protocol fees or licence income falls outside that category. Holding IP acquired from a group entity, or funded through overseas development, and licensing it within the group can be high-risk IP business. That business is presumed to fail the test unless the entity rebuts the presumption with evidence of Cayman control and qualified personnel working there (s 4(7)).
The BVI Economic Substance Act 2018 and the BVI International Tax Authority Rules (version 4, paras 5.30 to 5.31) treat licensing software and receiving licence income as IP business, with a similar high-risk presumption. Ordinary software services that use IP do not become IP business on that ground alone. Placing the treasury, the IP and the equity holding in one low-cost foundation can therefore produce a more demanding substance position than separating them.
Beneficial ownership disclosure applies to memberless and token-governed entities. The Cayman Beneficial Ownership Transparency Act uses a 25% ownership or voting threshold together with control through management or other means (s 4). Where no registrable owner is identified, the senior managing official is the contact person. The RMI requires passport-level beneficial-owner reports for DAO LLCs. The Cook Islands 2024 AML amendment requires reporting institutions to identify founders, board members, vested beneficiaries and other ultimate controllers of foundations. Pseudonymous token voting does not remove these identification duties.
Several assumed exemptions no longer apply. The Cook Islands removed the international company tax exemption in 2019, with the transition for older companies completed by 1 January 2022. The 2018 Nevis LLC amendment ended the former blanket exemption for relevant pre-existing companies by 30 June 2021. The RMI net profit tax starts with tax years beginning on or after 1 October 2026, and Mauritius foundations are within the Mauritius tax system. The BVI Business Companies Act exempts companies from BVI income tax (s 242), which leaves the founders' residence-country tax and the location of management untouched.
The founders' residence and the place where the business is actually managed often decide the tax result. US citizens remain taxable on worldwide income while living abroad. Where US shareholders, each holding at least 10%, together own more than 50% of an offshore company's vote or value, the controlled foreign corporation rules can tax income before any distribution. A company can be a passive foreign investment company if at least 75% of its gross income is passive or at least 50% of its assets produce passive income. A large token treasury in a development company is a reason to model that test.
A US founder who receives shares or tokens for services can make an election under Internal Revenue Code s 83(b) within 30 days after the transfer. The election requires an actual transfer of property, and Treasury Regulation s 1.83-3(e) excludes an unfunded and unsecured promise of future payment. Founder instruments should therefore identify the date and form of each transfer. Management decisions and contracting carried out in another country can also create a taxable presence there, and the registered office does not decide that question.
Tokens and destination markets
A token sale by an offshore issuer is tested under the law of the places where it is offered, promoted and used.
In the United States, the SEC's interpretation in Release No. 33-11412, issued on 17 March 2026 and effective on 23 March 2026, superseded the staff's 2019 framework for investment contract analysis of digital assets. It accepts that a functional digital commodity or tool may be a non-security asset while the fundraising transaction in which it is sold is an investment contract. The issuer analysis includes affiliates and agents. Splitting a project into a foundation and a development company therefore leaves the analysis intact where the development company is the promised source of managerial effort. A sale under a SAFT occurs when the agreement is entered into, and later delivery does not postpone the offering question. Regulation S requires an offshore transaction and no directed selling efforts in the United States, which incorporation in Cayman or the RMI does not supply. The SEC's August 2026 Regulation Crypto Assets package remains a proposal.
In the European Union, a token that qualifies as a financial instrument falls outside MiCA (art 2(4)(a)). ESMA's classification guidelines distinguish corporate and profit rights from technical votes over protocol upgrades and fees. A utility token under art 3(1)(9) gives access to goods or services supplied by its issuer. The public offer exemptions in art 4(2) cover offers to fewer than 150 persons per Member State, offers not exceeding €1 million over 12 months and offers restricted to qualified investors. Those exemptions leave the legal-person, marketing and art 14 duties in place, and an announced intention to seek admission to trading removes them (art 4(4)). An authorised crypto-asset service provider needs an EU registered office and EU management (art 59), and solicitation by the firm or persons acting for it defeats reliance on reverse solicitation (art 61). The transitional period for existing providers ended on 1 July 2026 at the latest (art 143(3)).
In the United Kingdom, the financial promotion restriction in the Financial Services and Markets Act 2000 s 21 applies to communications from abroad that are capable of having an effect in the UK. Fungible transferable cryptoassets are qualifying investments for this purpose, so a tradable governance token needs a lawful promotion route even if it is not a security. The routes are communication by an authorised person, approval by an authorised person with the relevant permission, communication by a registered cryptoasset firm, or an applicable exemption. The broader cryptoasset regime in SI 2026/102 comes fully into force on 25 October 2027, and the FCA's authorisation gateway opens on 30 September 2026.
Token design choices change the analysis in every market: rights to revenue, redemption or liquidation proceeds; conversion into shares; pooled yield; treasury repurchase programmes; and the statements made in the white paper, on the website and to investors. A promise removed from a contract still counts if it appears in an issuer-controlled channel.
The interface and independent front ends
The interface operator concentrates several exposures in one entity. It presents products and token information, controls access and checkout, collects fees, processes personal data and receives legal notices. A separate interface company can hold those contracts and obligations. The token issuer's offering liability and the obligations of whoever holds payment keys stay with those persons.
An independently operated front end that chooses its own terms, hosting and fees is assessed on its own conduct. A front end that is branded and funded by the project and uses project-controlled keys and registries may be attributed to the project. In some published structures the foundation itself is the interface counterparty: the Sui Foundation's terms of service govern sui.io and bridge.sui.io. The user terms of each interface should name the actual counterparty and describe its role accurately.
