Crypto Project Delays Token Delivery: What Investors Can Do

A Crypto Project Hasn't Delivered Your Tokens. What Can You Do?

You funded a crypto project under a token purchase agreement or a Simple Agreement for Future Tokens (SAFT) and the expected launch date has passed. However, your token allocation has not arrived, and the team is asking you to accept a longer vesting schedule, a smaller allocation, or tokens issued by a different entity. In this situation, the question arises: should you keep waiting, negotiate new terms, or pursue a claim?

According to Michael Handelsman, a law expert, the answer starts with the agreement, the events that triggered delivery, and the evidence of what happened. A missed expectation does not necessarily establish a breach. Equally, a project's explanation for the delay should be tested against its actual obligations.

Handelsman advises investors to start by identifying the legal entity that owes the obligation, the token and quantity, or formula for calculating your allocation, the event or date that triggers delivery, and any vesting, transfer restrictions, or investor requirements. It's essential to separate a projected launch date in a pitch deck from a binding deadline and distinguish token delivery from vesting and the ability to sell.

Handelsman also notes that if the project never launches or winds down, who can amend the terms and what approvals are required is crucial. Investors should preserve evidence before discussions move further, including executed agreements, side letters, and proposed amendments, payment records, transaction hashes, and relevant wallet addresses, investor presentations, and versions of the project's tokenomics.

Before making a demand, investors should review the dispute process, including the obligation, explanation why performance is due, and the requested remedy. It's essential to check the agreement's governing law and forum provisions to determine whether the dispute belongs in court or arbitration and what preliminary steps apply.