Stage six: the token generation event and distribution

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The token generation event is a technical act with legal consequences. The moment the tokens exist and are transferable, the AML duties attach in Switzerland, the PSA perimeter opens in Singapore, the prospectus or white paper is "live" and the tax clock starts. Four mechanics are used for distribution, each with a regulatory profile.

A direct sale by the issuer to onboarded participants at a fixed price. Simplest, but the issuer is the seller for AML, PSA and tax purposes.
An auction or bonding-curve sale through a smart contract. Reduces the issuer's role to that of a deployer, but FINMA and MAS look through the mechanics to the entity that benefits.
An airdrop to addresses that meet criteria. No sale and no consideration, so no prospectus and usually no PSA dealing, but a taxable receipt for the recipient in both hubs and a market-abuse exposure if the criteria are manipulated.
A liquidity bootstrapping pool or launchpad operated by a third party. Shifts the regulated activity to the operator, which must itself be licensed where it serves customers.

Airdrops deserve a note on tax. A Swiss private holder receiving an airdrop has taxable income at the market value on receipt, which the FTA working paper confirms. A Singapore recipient has income only if the airdrop is received in return for services or in the course of a trade. Otherwise it is a capital receipt.¹ A project that airdrops to its community in both hubs creates very different results for its Swiss and Singapore recipients. The communications should say so.

Notes

FTA working paper on cryptocurrencies, section on airdrops (taxable income at receipt for private holders); IRAS e-Tax Guide, "Income Tax Treatment of Digital Tokens", section 6.4 (airdrops received without consideration are not taxable unless the recipient is a trader or provided services). Part G, Chapter II, and Part M, Chapter I. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

All Singapore law advice is provided through KGP Legal LLC, an established and duly licensed firm of Singapore advocates and solicitors.

KGP Legal LLC is a medium-sized law firm in Singapore that is capable of providing the full range of legal services and corporate administration work. Please contact me directly at [email protected] if you need any further information.

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SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

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