What Are the Tax Implications for a US Investor upon the Conversion of a SAFT to a Token?

For a US investor, the conversion of a SAFT to a token is generally treated as a taxable event. The investor is considered to have exchanged the SAFT (a capital asset) for the newly issued tokens.

The difference between the fair market value of the tokens received and the original cost basis of the SAFT is realized as a capital gain or loss. The holding period for the tokens typically "tacks" onto the holding period of the SAFT, potentially qualifying the gain as a long-term capital gain if held for over a year.