Tokenized Equity Compensation: A Founder's Guide to RSUs and Token Grants

Your cap table has RSUs. Your company also has a token. Sooner or later a candidate asks to be paid partly in that token, and the equity playbook you already know stops fitting. Token grants look like equity in the offer letter and tax like something else entirely. Here is how the two actually differ, and how to pick between them.

TL;DR

• A token is not equity. An RSU is a claim on company stock. A token grant is a right to a digital asset, and the tax and securities treatment run on different tracks.
• For US tax, the IRS treats digital assets as property. Tokens received for services are ordinary income at fair market value on the day you receive them.
• A Section 83(b) election can move the taxable moment from vest to grant. It has to be filed within 30 days of the grant date, and the IRS now provides a standardized form for it, Form 15620, introduced in late 2024.
• The structure you pick (restricted token award, restricted token unit, or token option) decides the taxable event, the valuation reference point, and how much Section 409A exposure you carry.
• The regulatory backdrop is still moving. The GENIUS Act (stablecoins, signed July 2025) and the proposed CLARITY Act (token classification, House-passed July 2025, Senate-pending) both shape how grants get built.

Toku provides compliance infrastructure and is not a law firm. This content is for informational purposes only and does not constitute legal or tax advice. Consult your legal counsel for jurisdiction-specific guidance.

Tokenized equity compensation means paying the people who build your company in its digital token, instead of or alongside traditional equity like RSUs or options. Tokens are not legally equity, so they follow property-based tax rules rather than equity-compensation rules, and the structure you choose decides when tax is owed and on what value.

Get that decision right before the first grant and the rest is administration. Get it wrong and you are unwinding it later at a cost.

What is the real difference between equity and a token grant?

Equity is ownership of the company. A token is a right to a digital asset the company issues. Both vest. Both reward the people who showed up early. Both create upside. The legal substance is where they split, and the tax follows the substance, not the family resemblance.

Start with the instrument everyone understands. An RSU is a promise to deliver company stock once vesting conditions are met. When it vests and settles, the recipient owes ordinary income on the value of the shares, and from there the shares behave like equity for capital-gains purposes. The framework is decades old, and every accountant you will ever hire knows it cold.

A token grant gives someone the right to receive a token. For US tax purposes the IRS treats digital assets as property rather than currency, so a token received for services in a business context is taxed as ordinary income at fair market value at the time of receipt (IRS digital assets guidance, as of June 2026). That single fact sits underneath almost every difference that follows. The token is not stock, so the reliefs built for stock do not automatically reach it, and the question of when "receipt" happens becomes the whole game.

Treating a token as if it were equity is the most expensive mistake founders make in this corner of compensation. It is not a labeling problem. It changes the math.

RSU vs option vs token grant: which gives the employee what?

The vocabulary overlaps enough to cause real confusion, so this is the side-by-side most explanations skip.

Read the "Value measured at" column slowly. With a token that moves in price, the gap between being taxed on grant-date value and being taxed on vest-date or delivery-date value is not a footnote. It can be the entire economics of the grant. That is why the structure gets decided before anyone signs an offer letter.

These are nuanced, token-specific applications of tax law. Use the table to brief your counsel; it does not replace them.

How are token grants taxed, and when does the tax hit?

The default rule states cleanly and lives badly. Without an election, restricted tokens are taxed as ordinary income at vesting, on the fair market value at the time of vesting (Lowenstein Sandler, "Taxation of Token Awards," as of March 2024).

The timing is the trap. A contributor can vest into a price spike, owe ordinary income tax on that peak, then watch the token fall before they are allowed to sell. The bill is fixed at the high. The asset is not. For a restricted token unit, the income event lands when the tokens actually reach the recipient's wallet, and the tokens generally have to be issued no later than March 15 of the year following vesting to stay inside Section 409A (Lowenstein Sandler, as of March 2024).

The goal here is tax visibility: knowing exactly when the obligation lands and on what value, so nobody gets blindsided in April. It is not about shrinking the tax. Any plan framed that way is the wrong instinct, and in several jurisdictions it is the wrong side of the line.

Should you or your team file an 83(b) election?

An 83(b) election moves the taxable moment from vest back to grant. For an early-stage token with little value at grant, that can be the difference between a small, predictable bill now and a large, unpredictable one later.

The mechanics leave no slack. You file within 30 days of the grant date, and the window does not flex (IRS, as of June 2026). In late 2024 the IRS replaced the old self-drafted letter with a standardized form, Form 15620, and added online filing in 2025. The election only works when there is property to elect on, which is why it fits a restricted token award and not a restricted token unit, where nothing transfers at grant.

It cuts the other way too. Electing means paying tax now on tokens that may never trade or may lose most of their value. If the project never ships a token, or the token never trades, your contributor has paid real tax on value they never realized. The election is powerful and unforgiving, which is exactly why it belongs in a conversation with counsel rather than a default checkbox.

RTA, RTU, or token option: which structure fits your stage?

The choice turns less on preference and more on one question: does the token exist yet?

If it is live and transferable, a restricted token award puts tokens in contributors' hands now, with vesting and an 83(b) option on the table. If it is not live, or you would rather not transfer at grant, a restricted token unit promises future delivery and defers the income event to delivery, at the cost of 409A compliance and that March 15 issuance deadline. A token option fits when you want recipients to acquire tokens at a set price and capture the spread, though unlike a standard stock option it has to be 409A-compliant.

Stage tends to make the call for you. Companies before their token-generation event usually have nothing to grant yet, so they live in RTU territory. Companies with a liquid token already have the full menu. Then each contributor's home country narrows the choice again, and that is the part founders routinely underprice.

What about non-US team members?

The US framework is one column in the spreadsheet. The moment you grant to someone abroad, you are inside another country's rules.

The UK is the clearest contrast. Its equity schemes are genuinely generous. The Enterprise Management Incentive lets employees hold options worth up to £250,000 over a three-year period with no income tax or National Insurance when granted at market value, and the Company Share Option Plan allows up to £60,000 of shares (since 6 April 2023) with no income tax on the gain when exercised between three and ten years out (HMRC, as of June 2026). The catch for token issuers is simple. EMI and CSOP are equity schemes. Token grants do not slot into either. They are useful as the benchmark that shows a contributor what they give up by taking tokens, not as a wrapper tokens can borrow.

Every jurisdiction has its own version of that gap. This is why global token compensation usually rides on local employment infrastructure rather than a single global template. Where you need a contributor to be a properly employed person in their country, an employer of record handles the employment and tax side while the token grant sits on top.

What does the 2026 regulatory landscape mean for your plan?

Two pieces of legislation set the backdrop, and it helps to be precise about what each one does.

The GENIUS Act, signed into law in July 2025, created the first federal framework for payment stablecoins. It is the reason stablecoin payroll now has a clear compliance path. It does not govern token compensation, so treat it as context rather than the rulebook for your grants.

The bill that matters for grants is still a bill: the proposed CLARITY Act, the Digital Asset Market Clarity Act of 2025. It would split jurisdiction over digital assets, giving the CFTC authority over digital-commodity spot markets while the SEC keeps investment-contract assets. The House passed it 294 to 134 in July 2025, and as of June 2026 it remains pending in the Senate. Here is why it matters: whether a given token is treated as a security or a commodity shapes how a grant can be structured and what securities-law overlay applies. The status is genuinely unsettled, so build your plan on current rules and revisit it when the Senate acts.

The honest answer is that the framework is still forming. Structure conservatively, document everything, and assume you will come back to it.

How do you actually administer token grants once you've decided?

Choosing the structure is the strategy. Running it is the work, and it is the part most teams underestimate.

Administration means tracking fair market value at every grant and every vesting event, applying withholding where it is owed, managing 83(b) elections inside their 30-day windows, delivering tokens to verified wallets, and keeping records an auditor can follow. Done in spreadsheets across a global team, this is where compliance quietly breaks. One missed valuation. One blown election window. One delivery that slips past March 15. Tooling built for token compensation, like Toku's token grant administration, exists to make that layer routine instead of heroic.

Frequently Asked Questions

What is token compensation?

Token compensation pays the people building your company in its digital token, giving them a stake in what they are building, instead of or alongside cash and traditional equity. Companies use it to attract and keep global talent without relying entirely on cash. Because tokens are property rather than equity for tax purposes, token compensation follows different tax and structuring rules than RSUs or options.

Is a token grant the same as an RSU?

No. An RSU is a claim on company stock and is taxed under equity-compensation rules. A token grant is a right to a digital asset, which the IRS treats as property, so it is taxed as ordinary income at fair market value when received. Both can vest and both reward early contributors, but the legal substance, the tax treatment, and the available structures are all different.

Can you file an 83(b) election on a token grant?

Sometimes. An 83(b) election requires property to be transferred at grant, so it can apply to a restricted token award where tokens are granted subject to vesting. It cannot apply to a restricted token unit, where no token transfers at grant. When it is available, it must be filed within 30 days of the grant date using IRS Form 15620 (introduced in late 2024). Confirm eligibility with your counsel.

Are token grants taxed at grant or at vesting?

By default, at vesting, on the fair market value at that time. A valid 83(b) election on a restricted token award moves the taxable moment to grant, measured on the grant-date value. For a restricted token unit, the income event is when tokens are delivered to the wallet. The right choice depends on the token's expected price path and your contributor's risk tolerance, which is a conversation for counsel.

Do token grants qualify for UK EMI or CSOP?

No. EMI and CSOP are equity share schemes under UK rules, so token grants do not qualify. They are useful as a comparison point that shows the relief a contributor would get with equity, but tokens follow their own treatment. For global teams, token compensation usually rides on local employment infrastructure rather than equity-scheme reliefs.

Is this tax advice?

No. This is general information to frame the decision. Token compensation is fact-specific, the application of 83(b) and Section 409A to tokens is nuanced, and the regulatory framework is still being written. Use it to prepare for a conversation with your own legal and tax counsel, who can advise on your specific situation and jurisdiction.

Get the Structure Right Before the First Grant

Token compensation rewards founders who decide the structure deliberately and punishes the ones who improvise it. The tax timing, the 83(b) window, the 409A overlay, and the global employment layer all compound, and every one of them is cheaper to get right at grant than to unwind a year later. Talk to the Toku team about structuring and administering token grants across your team, and bring your counsel in early.