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.
Glossar
SAFT
Contract ⎊ A binding agreement, common in early-stage crypto fundraising, that grants an investor the right to receive a specified amount of a digital token upon a future qualifying event, such as a token generation event or priced financing round.
Clawback Provision
Provision ⎊ A clawback provision, within the context of cryptocurrency derivatives, options trading, and broader financial derivatives, represents a contractual clause enabling the recovery of previously distributed funds or assets.
Clawback
Mechanism ⎊ A clawback mechanism in cryptocurrency derivatives markets represents a risk management protocol designed to cover losses incurred by a defaulting trader when the exchange's insurance fund is depleted.
Saft Contract
Structure ⎊ A Simple Agreement for Future Tokens represents a contractual instrument utilized within the cryptocurrency ecosystem, primarily during initial coin offerings or token generation events.