The treasury is where token projects stake their survival: a mix of fiat, bitcoin and the native token whose tax treatment, custody and governance are almost never designed in time. Yet these decisions determine the long-term viability of the project.
Every token project eventually manages three very different categories of assets:
- Fiat currency received from investors or generated through operations;
- Reserve crypto-assets, typically Bitcoin or Ether;
- The project’s own native token.
Each of these assets raises distinct legal, tax, accounting and governance issues. Decisions taken—or omitted—before launch will shape the project’s future.
The treasury is not merely an accounting issue.
It is fundamentally a question of legal architecture.
First decision: Which entity owns what?
Well-structured token projects generally separate their legal functions.
A common approach is to have:
- One entity holding the protocol, intellectual property and long-term treasury; and
- A separate operating company responsible for the token offering and its relationship with users, particularly where the project operates within the European Union.
The treasury entity is often established in jurisdictions where the taxation of holding and disposing of crypto-assets is predictable.
Switzerland continues to stand out in this respect.
One of its principal advantages is the possibility of obtaining cantonal tax rulings, allowing projects to obtain advance certainty regarding the tax treatment of token issuances. For example, whether proceeds should be recognised as immediate taxable income or as deferred liabilities linked to future services.
In addition, several cantons—such as Zug—offer effective corporate tax rates of approximately 12%, making Switzerland particularly attractive for well-funded token projects.
This does not remove the need to comply with MiCA when offering tokens into the European Union, but it demonstrates that incorporation and regulatory compliance are two separate legaldecisions.
Second decision: How are unsold tokens taxed?
One of the most common—and expensive—mistakes occurs at the end of the first financial year.
Many founders discover that the token issuance has generated taxable profits without generating sufficient cash to pay the corresponding taxes.
Several questions require careful analysis before launch:
- How should the native token appear on the balance sheet?
- When should proceeds from private sales or pre-sales be recognised?
- How should reserve crypto-assets be valued?
- What VAT treatment applies to utility tokens compared with crypto-assets used purely as means of payment?
The answers differ significantly depending on the jurisdiction.
Proper tax planning is perfectly legitimate.
What is impossible is retroactive tax planning after the relevant transactions have already occurred.
Within Europe, different jurisdictions offer different advantages.
For example, Estonia’s corporate tax system—where profits are generally taxed upon distribution rather than when generated—may suit projects intending to reinvest earnings.
In Spain, the key issue is not necessarily the tax rate itself, but ensuring that every transaction is correctly documented and classified from the very beginning.
Third decision: Who controls the keys?
Treasury management is ultimately a governance issue rather than a purely technological one.
Good governance increasingly converges around several best practices:
- Multi-signature wallets with clearly defined approval thresholds;
- Separation between operational wallets and long-term reserve wallets;
- Written treasury policies governing transfers, limits and approvals;
- Contingency procedures covering the incapacity, resignation or removal of authorised signatories;
- Procedures addressing disputes between founders or regulatory intervention.
These measures are not excessive.
Experience repeatedly demonstrates that blockchain projects rarely fail because of sophisticated external attacks.
Much more often, they fail because the founders never clearly agreed on who could move the assets—or under what conditions.
Fourth decision: What happens when a dispute arises?
Sooner or later, disputes arise.
They may involve:
- founders with unvested allocations;
- early investors;
- custody providers;
- strategic partners;
- or even the project’s own community.
In almost every case, the treasury becomes the centre of the dispute.
The worst possible situation is discovering that different contracts refer disputes to different national courts, resulting in years of litigation while volatile digital assets remain inaccessible.
A better approach is to design a coherent dispute resolution framework from the outset.
Shareholders’ agreements, treasury arrangements, token sale documentation and governance documents should all contain compatible dispute resolution clauses.
Specialised arbitration before an institution familiar with blockchain technology—such as the BACS Court of Arbitration—can transform multiple parallel disputes into a single coordinated procedure with internationally enforceable awards.
It is often one of the least expensive elements to include during project design.
It frequently becomes one of the most valuable afterwards.
Conclusion: The legal architecture of a token project
This concludes our three-part series on issuing tokens in Europe.
Across the series, one central idea emerges.
In 2026, launching a token project is no longer simply a technological exercise.
It is primarily an exercise in legal classification, institutional design and governance.
The three key questions are closely connected:
- Where should the project be incorporated?
- Does it genuinely require a CASP licence?
- How should its treasury be structured?
Answering these questions before launch is considerably less expensive than attempting to correct them afterwards.
Good legal architecture is not an obstacle to innovation.
It is one of its strongest foundations.
This article is provided for general informational purposes only and does not constitute legal advice. Every token project requires an individual legal assessment. If you are preparing a token issuance, BACS can assist with a preliminary legal classification of your project before launch.
