Author: Crypto Salad

With the continuous improvement and development of the RWA regulatory framework, more and more RWA projects have begun to be implemented overseas. The core of the RWA project is to tokenize real-world assets. Once it involves token issuance business, since the laws and regulations of various countries have high compliance requirements for token issuance, the project party must "compliance first" when promoting RWA projects. The choice of the coin issuing entity is the basic but very critical point in the token issuance compliance issue.

In recent years, due to an open regulatory attitude and a complete institutional framework, Singapore has gradually become a "cryptocurrency paradise" sought after by entrepreneurs and investors in the cryptocurrency industry. It seems that it has become "natural" to choose the Singapore Foundation as the coin issuing entity for the RWA project.

What exactly is the foundation commonly mentioned in the cryptocurrency industry, and what is the difference between it and traditional funds?

Why do RWA projects usually choose foundations as the principal of issuing coins? Is the only choice only for foundations?

Why do you choose the Singapore Foundation as the main body?

At the moment in 2025, is the Singapore Foundation still the best coin issuing entities for RWA projects? Are there any other regions or other types of entities to choose from?

The crypto salad team has been deeply involved in the cryptocurrency industry for many years and has rich experience in dealing with complex cross-border compliance issues in the cryptocurrency industry. In this article, we will combine the legal frameworks of various countries and team practical experience to sort out and answer the above questions for everyone through the perspective of professional lawyers.

1. What exactly is the foundation? What is the difference between a foundation and a traditional fund?

Although different laws have different definitions and structures for "foundations", most foundations have at least the following characteristics:

Non-profit and public welfare: The foundation is established for public welfare purposes, and the income from the operation is only used for reinvestment of the foundation and cannot be distributed to members. Compared with the company, the foundation does not have shareholders (Shareholders) but only members (Members).

Have independent legal person status: The foundation, as an independent legal entity, has its own assets and internal governance institutions. For example, some foundations have boards and supervisory boards under them are responsible for managing the daily matters of foundation operations.

(The above picture shows the internal governance model of a certain foundation, for reference only)

In contrast, the traditional sense of "fund" essentially belongs to an investment tool or a collection of fund pools. The common "fund companies" in the financial industry are actually a type of "fund manager". Fund companies raise funds from investors by issuing "fund products" to form a fund pool, andBy managing the fund pool, investors can obtain returns, and finally complete the fund's "raising, investing, managing and returning" and collect management fees from it.

(The above picture shows the operating model and legal structure of corporate funds)

From this we can see that although "Fund" and "Fund" are similar in daily expression, their meanings are very different at the legal level.

2. Why does the cryptocurrency industry have a special liking for foundations?

First of all, foundations are usually non-profit and public welfare. Their purpose is to promote the development of social public welfare, rather than to maximize the interests of centralized institutions or specific natural persons, which corresponds to the decentralized characteristics of the cryptocurrency industry. Moreover, the foundation will not distribute benefits to the organization members, and members only participate in the foundation's governance as the foundation's managers. This feature coincides with the community autonomy governance framework advocated by the cryptocurrency industry and Web3 field. Therefore, cryptocurrency entrepreneurs’ choice of foundation as the main body is not only conducive to the project party’s packaging and promotion, but also easier to gain the trust of investors and community participants.

Secondly, more and more project parties regard the foundation as the entity of the project, a large part of the reason is because they are influenced by the famous Ethereum Foundation. Ethereum (ETH), the current mainstream cryptocurrency with the second largest market value in the world, also chose the foundation as its operating entity. Since Ethereum is second only to Bitcoin in the cryptocurrency industry, the Ethereum Foundation naturally has great influence, so it has also influenced many entrepreneurs and players in the new Web3 industry to choose foundations as entities.

Lastly, due to the non-profit nature of the foundation itself, in many laws, foundations can obtain tax exemptions or obtain certain tax benefits after meeting specific conditions or obtaining specific approvals. Therefore, choosing a foundation as the coin issuing entity can enjoy tax exemptions or discounts, thereby reducing the operating costs of the project.

In short, after long-term development abroad, the foundation's institutional framework has been very perfect and mature. And the characteristics of the foundation itself are very consistent with the various real needs of the cryptocurrency industry. Moreover, since practitioners and participants in the cryptocurrency industry are showing a very significant trend of youth, they are also very interested in the foundation, which is well-known and more serious, by the traditional "old money". Therefore, this concept has gradually become a trend in the currency circle, attracting more and more attention.

But it should be noted that from a legal perspective, if you want to complete the issuance of tokens, you do not necessarily need to pass the foundation as the entity. In fact, RWA project parties can also choose traditional private individuals.Profit entities such as limited liability companies and joint stock companies are used as coin issuing entities. Most project parties choose the foundation as the principal of issuing coins, which may be more of a comprehensive decision made from commercial perspectives such as project promotion, operating costs, and tax planning. Therefore, there is no need for practitioners to be too superstitious about the foundation, which is not the only coin issuing entities in the RWA project. Moreover, as a non-profit organization, the foundation can receive cryptocurrency assets, but it cannot open accounts in commercial banks normally in many areas. Therefore, if the foundation is used as the principal of issuing coins, a private limited company should be set up to match it.

3. What is the foundation in Singapore? Why do RWA projects tend to choose the Singapore Foundation as the coin issuing entity?

It should be noted here that the so-called "Singapore Foundation" is more like a conventional statement in the cryptocurrency industry. From a legal perspective, there is actually no concept of foundation in Singapore's law in the traditional sense. The "Singapore Foundation" commonly referred to in the cryptocurrency industry actually refers to a legal entity recognized as a "Not-for-Profit Organization" in accordance with Singapore laws. Many types of legal entities can be identified as non-profit organizations, such as Public Company Limited by Guarantee, society or charitable trusts. For RWA project parties, they usually choose the legal entity of guarantee limited liability company. Therefore, the so-called "Singapore Foundation" in the cryptocurrency industry is actually a guarantee limited company recognized as a "non-profit organization".

The main reasons why the cryptocurrency industry often chose the Singapore Foundation as the principal of issuing coins in the past are as follows:

First, the Singapore authorities have a relatively open and inclusive attitude towards the entry of the cryptocurrency industry into Singapore in the past few years. This can be specifically reflected in the approval of the Singapore authorities' registration application for foundations as the subject of coin issuing coins. At that time, many cryptocurrency projects could easily pass relevant approvals and complete token issuance in the form of a Singapore Foundation.

Secondly, Singapore has actively supported the development of blockchain and cryptocurrencies in recent years, providing a world-leading legal framework and regulatory environment for token issuance activities. Not only are cryptocurrencies confirmed as legal in Singapore, but any contract involving cryptocurrencies will not be deemed illegal because of their involvement. At the same time, Singapore has also formulated a complete legal framework for cryptocurrencies, and relevant laws and regulations cover all aspects such as ICO (initial token issuance), taxation, anti-money laundering/anti-terrorism, and purchase/transaction of virtual assets.

Finally, Singapore has a very developed financial and legal infrastructure, which has long attracted the attention of various international capitals and has a good international reputation. Therefore, setting up a coin issuing entity in Singapore will make the project more credible and professional. Meanwhile, Singapore andIt is located in the East Eighth District time zone, and there is no time difference between the two, which is also very friendly to the huge number of Chinese players and project parties in the currency circle.

So in 2025, can the RWA project still choose the Singapore Foundation as the project's coin issuing entity?

From the legal perspective alone, the Singapore authorities have not explicitly prohibited the Singapore Foundation from landing in Singapore as the principal of issuing coins. However, the crypto salad team learned from the latest communication with local law firms, accountants and company secretaries in Singapore that in recent years, there have been many compliance regulatory issues in cryptocurrency companies established in the form of Singapore Foundation. After that, due to public opinion and regulatory pressure, the Singapore authorities, led by ACRA (Singapore Accounting and Enterprise Administration), began to significantly tighten the approval of foundations engaged in the crypto industry.

Based on mutual confirmation by multiple sources, what can be confirmed so far is that ACRA will conduct a detailed background check on the foundation when registering. Once it is found that the foundation has a possibility of correlation with the cryptocurrency industry, it will basically not approve its registration application. Therefore, although it is still legally feasible to choose the Singapore Foundation as the coin issuing entity of the RWA project, it has basically been blocked from the practical level.

4. So in addition to the Singapore Foundation, what other coin issuing entities can be selected for RWA projects to implement them?

Based on years of relevant business experience and successful cases, the crypto salad team recommends the following two options as the coin issuing subject:

The first option is the American Foundation

In fact, the logic of choosing the American Foundation as the coin issuing subject is basically consistent with the logic of choosing the Singapore Foundation as the subject. The biggest difference between the two is that the current attitude of US regulators towards token issuance activities is still relatively open. Moreover, the new President Trump also supports the cryptocurrency industry as a whole.

And the registration cycle of the US Foundation is relatively fast, and the threshold requirements are simple and limited. Taking Colorado as an example, registering a non-profit foundation in Colorado can usually be completed within one week.

The second option that can be considered is the UAE Foundation or DAO organization

Among them, the overall structure of the UAE foundation is also relatively similar to that of the Singapore Foundation. However, it should be noted that Singapore and the UAE belong to different legal systems. Singapore belongs to the British and American legal system, while the UAE Islamic legal system has huge differences in the application of law and judicial system. This is critical when dealing with complex compliance issues across legal domains.

The DAO organization (Decentralized Autonomous Organization) is an organizational form based on blockchain technology that realizes autonomy through smart contracts. In response to this novel organizational form, the UAE authorities have issued complete rules and regulations (DAO Association Reguland corresponding regulatory frameworks. According to relevant rules and regulations, DAO organizations in the UAE have independent legal personality and are also non-profit.

At the same time, according to the information disclosed by Binance, it can be seen that Binance has officially reached an investment transaction of US$2 billion with Abu Dhabi's investment institution MGX. This is the first time Binance has introduced external institutional investors since its establishment. One of the co-founders of the investment institution MGX is the UAE's Abu Dhabi sovereign fund. The UAE sovereign fund and the largest mainstream exchange in the currency circle have joined forces, and it is expected that the two sides will further promote the development of the cryptocurrency industry in the UAE. Therefore, in the long run, the prospects for crypto development in the Middle East are indeed worth looking forward to.

In short, the UAE Foundation or DAO organization is also an optional coin issuing entity. However, choosing to register a foundation or DAO in the UAE will be relatively expensive, so it is more suitable for projects of a certain scale.

5. If you choose the American Foundation as the principal of the issuing coin of the RWA project, what risks and clamp points should you pay attention to?

First, token issuance in the United States in the form of foundations requires obtaining corresponding licenses, such as the MSB license issued by the Financial Crime Enforcement Bureau (FinCEN).

Secondly, due to the tense geopolitical relationship between China and the United States, the United States' attitude and intensity of supervision of offshore companies have changed frequently, which will bring uncertainty to the company's long-term compliance operations.

In addition, the commercial laws and regulations related to finance and companies in the United States are extremely complex, and they need to systematically understand federal laws and state laws, so it is difficult and complex to complete compliance.

Finally, the tax review of the United States' tax agencies (IRS) is very strict, as the American proverb says: Only death and taxation are inevitable in a person's life. Therefore, to establish a foundation entity in the United States, a professional tax planning team needs to support and deal with related tax issues, otherwise the company's affiliates will be at risk of being affected by the long-arm jurisdiction of the United States.

6. Interpretation of crypto salad

At the moment when the regulatory prospects of the global cryptocurrency industry are still unclear, when the project party implements the RWA project, it must adhere to "compliance first". Therefore, the RWA project party needs to actively cooperate closely with a professional cryptocurrency industry lawyer team to jointly promote the implementation of the project.