What Is a “Clawback” Provision in a SAFT Contract?

A "clawback" provision in a SAFT contract is a clause that allows the issuer to reclaim or "claw back" the tokens delivered to the investor under specific, pre-defined circumstances. While not standard, it might be included to manage regulatory risk.

For example, if the regulatory status of the token changes and the issuer needs to maintain compliance, a clawback could be triggered. More commonly, a clawback is associated with employee stock options or venture capital agreements and is used to reclaim shares if a recipient breaches a contract or leaves the company early.