How Gnosis Uses Toku for Swiss Employment & Compliant Token Grants

The Web3 ecosystem is built on decentralization, innovation, and global collaboration. Few companies embody this vision as clearly as Gnosis, a blockchain technology provider developing cutting-edge infrastructure and tools for decentralized communities. By empowering developers and users with reliable technology, Gnosis is helping to shape the next generation of the digital economy.

But behind every Web3 success story is a very real operational challenge: how to compliantly employ and compensate contributors around the world. While crypto organizations are borderless in design, their contributors are still tied to the legal and tax frameworks of their home countries. That means employment contracts, payroll, benefits, and token grants must be carefully structured to remain compliant across multiple jurisdictions.

For Gnosis, this reality became particularly clear when contributors in Switzerland required not just token grants, but also formal employment relationships. Without proper employment status, contributors often struggle to access basic services like visas, mortgages, and proof of income. At the same time, Gnosis wanted to continue offering token-based compensation, a core part of its culture and incentive model.

This created a dual challenge:

1. Provide Swiss contributors with compliant employment arrangements, including benefits and legal protections.
2. Deliver token grants (GNO) in a way that met Swiss tax and regulatory obligations, including income reporting, social security contributions, and employer costs.

That’s where Toku came in. By partnering with Toku, Gnosis was able to bridge the gap between innovative token-based compensation and the strict requirements of Swiss employment law—enabling the team to remain globally distributed while staying compliant.

Addressing the Real-World Needs of Contributors While Continuing to Offer Token Grants

Like many globally distributed Web3 teams, Gnosis faced a unique balancing act. On one hand, they had the technical, legal, and financial expertise to manage token compensation for their worldwide contributor base. On the other, contributors themselves had very real personal needs that tokens alone could not address.

For many contributors, token grants represented opportunity, ownership, and alignment with the long-term growth of the ecosystem. But tokens were not enough when it came to navigating everyday life:

• Visas and Residency: Some contributors required proof of formal employment to obtain or extend visas in Switzerland. Without an employer-employee relationship, immigration authorities were reluctant to process their applications.
• Mortgages and Loans: Financial institutions often require verified employment contracts and regular payslips before granting mortgages or personal loans. Token income—especially without a clear legal employment structure—was rarely accepted as sufficient proof of income.
• Insurance and Benefits: Local laws in Switzerland mandate employer participation in social security, health insurance contributions, and retirement plans. Without a compliant employment setup, contributors risked losing access to these safety nets.

At the same time, Gnosis wanted to preserve the token element of its compensation model. Token grants were not just an incentive mechanism; they were a reflection of the organization’s values, promoting ownership and shared success. The challenge was finding a way to combine both: formal employment structures that met Swiss legal requirements, and compliant token grants that reflected Web3 culture.

This is where Toku became the bridge. By stepping in, Toku allowed Gnosis to meet contributors’ personal and professional needs while ensuring the organization stayed compliant at every step.

Swiss Employment with Locally Compliant Token Grant Awards

To resolve these challenges, Gnosis partnered with Toku to design a compensation framework that aligned with both the Swiss legal system and the Web3 ethos of shared ownership.

The solution was a dual compensation structure:

1. Base salary in fiat (Swiss Francs) delivered through a locally compliant employment contract.
2. Token option grants (GNO) awarded in parallel, structured to reflect Swiss tax and labor obligations.

Designing the Employment Relationship

Toku collaborated closely with Gnosis’s legal and HR teams to craft an employment agreement that met the requirements of Swiss labor law. This included:

• Clear employment status with a locally registered employer entity, ensuring contributors had access to benefits, pension, and social security contributions.
• Compliance with Swiss wage standards including paid leave, insurance coverage, and adherence to labor protections.
• Documentation suitable for immigration purposes, enabling contributors to successfully apply for or renew visas.

Structuring the Token Options Agreement

In parallel, Toku worked with Gnosis to design a token options plan that:

• Reflected Swiss legal classification, treating token options as taxable income at the time of exercise.
• Built in clear vesting schedules that balanced contributor incentives with organizational sustainability.
• Ensured alignment with Gnosis’s existing compensation philosophy, preserving token-based ownership for contributors.

Managing Employer and Employee Tax Obligations

Switzerland has specific requirements for token-based compensation:

• Tax treatment: Token options are classified as bonus payments and subject to income tax.
• Social security contributions: Both the employer and employee must contribute based on the fair market value of the tokens at exercise.
• Withholding obligations: Employers must withhold and remit mandatory social contributions before delivering tokens to employees.

Toku’s platform handled the heavy lifting by:

• Calculating the fair market value of GNO tokens at the time of exercise.
• Automatically determining both employer costs and employee liabilities.
• Withholding the required contributions and remitting payments directly to the Federal Tax Administration (FTA).

Technical Note: Token Compensation in Switzerland

Switzerland has long been recognized as a hub for blockchain and crypto innovation, but that comes with a strict and well-defined regulatory environment. Unlike many jurisdictions where token compensation remains a gray area, Swiss authorities — particularly the Federal Tax Administration (FTA) — have issued clear guidance on how tokens and token options must be treated for employment and tax purposes.

1. Classification of Token Options

• Employment-linked: Token option grants are considered part of an employee’s overall compensation package.
• Taxable as income: At the time of exercise (when options are converted into tokens), their fair market value (FMV) is treated as taxable income to the employee.
• Employer obligations: Employers must withhold applicable taxes and remit them to Swiss authorities, just as they would for traditional bonus or stock option payments.

2. Social Security Contributions

Swiss law requires that both the employer and employee contribute to social security on all forms of income, including token options. This includes:

• AHV (Old Age and Survivors Insurance)
• IV (Disability Insurance)
• EO (Income Compensation for Military Service & Maternity/Paternity Leave)
• ALV (Unemployment Insurance)

These contributions are calculated based on the FMV of the tokens at the time of delivery.

3. Withholding at Source

Because employees typically receive tokens directly, there is a risk that insufficient funds are set aside for taxes. To address this:

• Employers must withhold social security contributions upfront, prior to delivering tokens.
• This ensures the FTA receives payment in fiat, even if the employee chooses to hold tokens instead of converting them.

4. Comparison to Other Jurisdictions

• United States: The IRS taxes tokens as property, leading to income tax at the time of receipt and potential capital gains at sale. However, U.S. rules around withholding for token grants remain inconsistent.
• European Union: Each member state has different interpretations — Germany exempts some long-held crypto from capital gains tax, while France treats crypto payroll strictly as taxable income.
• Switzerland: Provides one of the clearest frameworks, treating tokens as bonus payments subject to both income tax and social contributions, with mandatory employer withholding.

This clarity is both a benefit and a challenge: while companies know exactly what is required, compliance can be administratively heavy without the right systems.

5. Why Toku’s Role Was Critical for Gnosis

• Automated FMV Calculations: Token values fluctuate daily; Toku’s system captured real-time pricing to ensure accurate tax assessments.
• Withholding & Remittance: Toku withheld the necessary social contributions in fiat and remitted them to the FTA — removing the manual burden from Gnosis.
• Audit-Ready Records: By generating compliant reports, Toku ensured Gnosis could demonstrate full compliance in the event of an audit.
• Contributor Support: Beyond legal compliance, contributors gained clarity around their tax obligations, making token compensation a real, usable benefit instead of a liability.

Results & Impact

By partnering with Toku, Gnosis was able to bridge the gap between Web3-native compensation models and the rigorous demands of Swiss employment law. The outcome was not just compliance—it was a more stable, efficient, and attractive environment for contributors.

1. Time Savings & Operational Efficiency

Before Toku, processing token grants and employment-related compliance meant significant manual effort from Gnosis’s legal and finance teams. After implementation:

• Token compensation administration time was reduced by dozens of hours per month.
• Gnosis’s teams could reallocate resources toward product and ecosystem growth instead of operational overhead.

2. Legal & Tax Compliance Secured

With Toku’s infrastructure:

• Employment agreements and token option awards were fully aligned with Swiss law.
• Both employer and employee contributions to social security were calculated and remitted correctly.
• Gnosis maintained an audit-ready trail of records, protecting the organization from potential regulatory scrutiny.

3. Contributor Satisfaction & Retention

Contributors benefited directly from the new structure:

• Those requiring visa support in Switzerland could now rely on verified employment contracts.
• Contributors applying for mortgages or loans had access to proof of income accepted by banks.
• The ability to continue receiving token grants meant employees enjoyed both financial stability and long-term ownership in the project.

This combination of stability plus upside created a more compelling employee value proposition—one that helped Gnosis attract and retain top talent in an increasingly competitive Web3 job market.

4. Enhanced Organizational Reputation

By proactively addressing compliance, Gnosis demonstrated to regulators, partners, and investors that it was serious about governance and sustainability. This compliance-first approach not only reduced legal risks but also strengthened Gnosis’s standing as a credible, institutional-ready Web3 organization.

📌 In summary: With Toku, Gnosis transformed token compensation from a potential compliance liability into a strategic advantage. The project now enjoys smoother operations, happier contributors, and a stronger global reputation.

Take the Next Step Toward Compliant Token Compensation

Gnosis’s journey shows that token compensation doesn’t have to mean compliance headaches. With Toku, they created a system that was fully aligned with Swiss regulations, gave contributors the documentation and stability they needed, and freed internal teams from hours of administrative work each month.

Your organization can achieve the same. Whether it’s navigating tax rules, structuring token grants, or supporting contributors with full employment benefits, Toku provides the infrastructure to make it happen — quickly, reliably, and globally.

👉 Don’t wait for compliance issues to slow you down. Contact Toku today and build a compensation framework that empowers your contributors while protecting your project.