How to use this checklist: Work through each section before your token generation event (TGE). The accounting policy decision (Section 1) drives how proceeds are recognised and reported — it must be resolved before the TGE date, not after. Vesting smart contract audits (Section 2) and HMRC treatment of team token grants are the two items that most frequently get missed until they create a problem.
1. Pre-TGE Accounting & Tax Setup
- Token accounting policy approved by boardLiability, equity, or revenue treatment documented — board approval minuted before TGE date.
- HMRC advance clearance sought where treatment is uncertainRecord of HMRC correspondence or counsel advice filed — uncertainty documented and position defensible.
- VAT analysis completedWhether the token issue is exempt, zero-rated, or standard-rated for VAT purposes confirmed — HMRC brief or counsel opinion on file.
- Corporation tax analysisTiming of when token proceeds become taxable income determined — consistent with the accounting policy adopted.
- Token proceeds segregatedLaunch proceeds held in a separate treasury account — clearly distinguished from operational cash from day one.
- Multi-sig wallet policyRequired signatories for all token movements confirmed and tested before TGE — quorum and escalation process documented.
2. Vesting & Token Allocation
- Token allocation schedule signed off by boardTeam, investor, ecosystem, treasury, and public allocations approved — schedule locked before TGE.
- Vesting contracts reviewed by legalCliff, vesting period, and acceleration provisions reviewed — legal sign-off on smart contract terms obtained.
- Team token grant employment tax analysisIncome tax and National Insurance implications of team token grants assessed — PAYE or self-assessment obligations identified.
- Smart contract audit completedIndependent technical audit of vesting smart contracts completed — critical findings resolved before TGE.
- SAFT/token warrant agreementsAll pre-TGE instruments reviewed for alignment with final token terms — any discrepancies resolved with investors pre-launch.
3. Treasury Management Plan
- Post-TGE treasury policy approvedBoard-approved policy documenting how tokens held in treasury will be managed — including concentration limits and governance.
- Sell-down scheduleIf tokens are to be sold for fiat, methodology, timing, disclosure obligations, and market impact considerations all documented.
- Exchange listing costs budgetedListing fees, market-making requirements, and legal costs all included in the post-TGE budget.
- Liquidity provisionMarket-making arrangements reviewed for accounting treatment and any disclosure obligations — documented and board-approved.
- Fiat conversion planMechanism for converting token treasury into fiat runway documented — FX risk, timing, and execution approach confirmed.
4. Exchange Listing Finance
- Listing fee reviewTerms of each exchange listing agreement reviewed — recurring obligations (annual fees, volume commitments) noted and budgeted.
- Market-making budgetCost of market-making services included in the operating budget — term, minimum spread obligations, and exit terms reviewed.
- Stablecoin pairsIf trading against stablecoins, issuer risk assessed — counterparty stability and redemption terms reviewed.
- Regulatory classification at listing venuesConfirmed no exchange requires a regulatory exemption or additional filing as a condition of listing.
5. Post-TGE Reporting
- Token holder reportingFrequency, format, and content of treasury disclosures to token holders agreed — process documented before first report is due.
- Annual accounts disclosureToken holdings, proceeds, and vesting obligations disclosed in the statutory accounts per the adopted accounting policy.
- HMRC year-end reportingAll disposals from treasury correctly reported in the corporation tax return — disposal proceeds and cost basis calculated.
- Audit preparationAuditor briefed on token volumes, exchange platforms, and valuation methodology — evidence pack assembled before audit commences.
