Showing posts from June, 2022

Token Compensation Income -- to 83(b) or not to 83(b)

  Token Compensation Income   As I’ve said multiple times in this blog, I don’t think that conventional wisdom from the VC world translates all that well into the crypto world.   One example relates to tokens issued as compensation.   Leaving aside all the questions about whether a four year vest makes sense, and more significantly, whether a double trigger acceleration on change of control is even relevant (on Network Launch I get it), there are some significant economic questions for employees.   In the VC world, you may often want to early exercise a stock option, make an 83(b) election (which causes you to be taxed as if you’d received the shares on the exercise date without any restriction (vesting)), and then hope that the stock appreciates so that you have income that is taxed as long term capital gain.   That’s a good plan where the exercise price is low enough and there is no market for the stock.     But outside the VC world where the stock is al