Author: Encrypted Salad
With the continuous improvement and development of the RWA regulatory framework, more and more RWA projects have begun to land overseas. The core of the RWA project is to tokenize real-world assets. Once it comes to the 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 the RWA project. The choice of the issuer is a basic but very critical point in the compliance issue of token issuance.
In recent years, due to its open regulatory attitude and sound institutional framework, Singapore has gradually become a "cryptocurrency paradise" sought after by entrepreneurs and investors in the cryptocurrency industry. It seems that choosing the Singapore Foundation as the issuer of the RWA project has become "natural."
What exactly is the foundation often mentioned in the cryptocurrency industry, and how is it different from a traditional fund?
Why do RWA projects usually choose foundations as the coin issuer? Is the foundation the only option?
Why do you choose Singapore Foundation as the entity?
As of 2025, is the Singapore Foundation still the best coin issuer for the RWA project? Are there 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 the team's practical experience to sort out and answer the above questions from the perspective of professional lawyers.
1. What exactly is a foundation? What is the difference between a foundation and a traditional fund?
Although different countries 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. The income from operations is only used for reinvestment of the foundation and cannot be distributed to members. Compared with a company, a foundation has no shareholders, only members.
Independent legal personality: As an independent legal entity, the foundation has its own assets and internal governance structure. For example, some foundations have a board of directors and a board of supervisors to manage the daily operations of the foundation.
(The above picture shows the internal governance model of a foundation, for reference only)
In contrast, the traditional "fund" is essentially an investment tool or a pool of funds. The "fund company" commonly seen in the financial industry is actually a type of "fund manager". Fund companies raise investors' funds by issuing "fund products" to form a pool of funds, and manage the pool of funds to obtain returns for investors, ultimately completing the "raising, investing, managing, and withdrawing" of the fund, and charging management fees.
(The above picture shows the operating model and legal structure of a corporate fund)
From this we can see that although "Fund" and "Foundation" are similar in daily expression, their meanings at the legal level are very different.
2. Why does the cryptocurrency industry have a special liking for foundations?
First of all, foundations are usually non-profit and public welfare-oriented. Their purpose is to promote the development of social public welfare, rather than to maximize the interests of centralized institutions or specific individuals, which corresponds to the decentralized nature of the cryptocurrency industry. In addition, foundations do not distribute benefits to members of the organization. Members only participate in the governance of the foundation as managers of the foundation. This feature also coincides with the community-autonomous governance framework advocated by the cryptocurrency industry and the Web3 field . Therefore, cryptocurrency entrepreneurs choose foundations as the main body, which is not only conducive to the packaging and promotion of the project, but also easier to gain the trust of investors and community participants.
Secondly, more and more project parties choose foundations as the entity of the project, in large part because of the influence of the famous Ethereum Foundation . Ethereum (ETH), as the second largest mainstream cryptocurrency in the world by market value, also chose the foundation as its operating entity. Since Ethereum's important position in the cryptocurrency industry is second only to Bitcoin, the Ethereum Foundation naturally has great influence, so it has also influenced many new Web3 industry entrepreneurs and players to choose the foundation as an entity.
Finally, due to the non-profit nature of the foundation itself, in the laws of many countries, the foundation can obtain tax exemption rights or specific tax benefits after meeting certain conditions or obtaining specific approvals. Therefore, choosing a foundation as the issuer can enjoy tax exemptions or benefits, thereby reducing the operating costs of the project.
In short, after a long period of development abroad, the institutional framework of the foundation itself is already very complete and mature. The characteristics of the foundation itself are very consistent with the various practical needs of the cryptocurrency industry. Moreover, since the practitioners and participants in the cryptocurrency industry are showing a very significant trend of younger people, they are also very interested in the foundation, a more serious subject form that is well known by the traditional "old money". Therefore, this concept has gradually become a trend in the cryptocurrency circle, thus attracting more and more attention.
However, it should be noted that from a legal point of view, if you want to complete the issuance of tokens, you do not necessarily need to go through the foundation as an entity. In fact, the RWA project party can also choose traditional private limited companies, joint-stock companies and other profit-making entities as the coin issuer. Most project parties choose the foundation as the coin issuer, which may be a comprehensive decision made from commercial perspectives such as project promotion, operating costs, and tax planning. Therefore, practitioners do not need to be too superstitious about the foundation, as it is not the only coin issuer of the RWA project. Moreover, as a non-profit organization, the foundation can receive cryptocurrency assets, but it cannot open accounts normally in commercial banks in many countries or regions. Therefore, if the foundation is used as the coin issuer, it is usually necessary to set up a private limited company to match it.
3. What is a Singapore foundation? Why does the RWA project prefer to choose a Singapore foundation as the main body of the token?
It should be noted here that the so-called "Singapore Foundation" is more like a common term in the cryptocurrency industry. From a legal point of view, there is actually no concept of a foundation in the traditional sense in Singapore law. The "Singapore Foundation" often mentioned in the cryptocurrency industry actually refers to a legal entity that is recognized as a "non-profit organization" (Not-for-Profit Organization) under Singapore law. Many types of legal entities can be recognized as non-profit organizations, such as public companies limited by guarantee, societies or charitable trusts. For RWA project parties, they usually choose a legal entity limited by guarantee. Therefore, the so-called "Singapore Foundation" in the cryptocurrency industry is actually a guarantee company recognized as a "non-profit organization".
The main reasons why the cryptocurrency industry often chooses Singapore Foundation as the main body of currency issuance are as follows:
One reason is that the Singaporean authorities were relatively open and tolerant to the cryptocurrency industry entering Singapore in the past few years. This can be specifically reflected in the Singaporean authorities' approval of the registration application of the foundation as the issuer of the currency. At that time, many cryptocurrency projects could easily pass the relevant approvals and complete the token issuance in the form of a Singaporean foundation.
Second, the Singapore government has actively supported the development of blockchain and cryptocurrency in the past few years, providing a world-leading legal framework and regulatory environment for token issuance activities. Not only is cryptocurrency recognized as legal in Singapore, but any contract involving cryptocurrency will not be deemed illegal because it involves cryptocurrency. At the same time, Singapore has also formulated a comprehensive legal framework for cryptocurrency, and relevant laws and regulations cover various aspects such as ICO (initial coin offering), taxation, anti-money laundering/anti-terrorism, and the purchase/trading of virtual assets.
Finally, Singapore has a very developed financial and legal infrastructure, has long attracted the attention of various international capitals, and has a good international reputation. Therefore, setting up a currency issuer in Singapore will make the project more credible and professional. At the same time, Singapore and China are in the same time zone, East 8, and there is no time difference between the two, which is also very friendly to the large 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 issuer?
From a purely legal perspective, the Singapore authorities have not explicitly prohibited Singapore foundations from being established as currency issuers in Singapore. However, the Crypto Salad team learned through the latest communication with local law firms, accountants, and company secretaries in Singapore that cryptocurrency companies established in the form of Singapore foundations have encountered many compliance and regulatory issues in recent years. Since then, due to pressure from public opinion and policy supervision, the Singapore authorities, led by ACRA (Accounting and Corporate Regulatory Authority of Singapore), have begun to significantly tighten the approval of foundations related to the cryptocurrency industry.
Based on the mutual confirmation of multiple sources, it can be confirmed that ACRA will conduct a detailed background check on the foundation when registering it. Once it is found that the foundation has a possible connection with the cryptocurrency industry, it will basically not approve its registration application. Therefore, although the RWA project still has legal feasibility to choose a Singapore foundation as the issuer, it has basically been blocked in practice.
4. So, in addition to the Singapore Foundation, what other coin issuing entities can the RWA project choose to implement?
Based on years of relevant business experience and successful cases, the Crypto Salad team recommends the following two options as the coin issuer:
The first option is an American foundation
In fact, the logic of choosing a US foundation as the issuer is basically the same as that of choosing a Singapore foundation. The biggest difference between the two is that the US regulators are still relatively open to token issuance activities. Moreover, the new President Trump is also supportive of the cryptocurrency industry as a whole.
The registration cycle of a US foundation is relatively fast, with simple threshold requirements and fewer restrictions. For example, in Colorado, registering a non-profit foundation can generally be completed within a week.
The second option to consider is the UAE Foundation or DAO organization
Among them, the overall structure of the UAE foundation is 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 Anglo-American legal system, while the UAE is an Islamic legal system. There are huge differences between the two in terms of applicable laws and judicial systems. This is very critical when dealing with complex compliance issues across jurisdictions.
The DAO (Decentralized Autonomous Organization) is a form of organization that is based on blockchain technology and achieves autonomy through smart contracts. The UAE authorities have issued complete rules and regulations (DAO Association Regulations) and a corresponding regulatory framework for this novel form of organization. According to the relevant rules and regulations, the UAE DAO organization has an independent legal personality and is also non-profit.
At the same time, according to the information officially disclosed by Binance, Binance has officially reached an investment transaction with Abu Dhabi's investment institution MGX for a total of US$2 billion. This is the first time that Binance has introduced external institutional investors since its establishment. One of the co-founders of the investment institution MGX is the Abu Dhabi Sovereign Fund of the UAE. The strong combination of the UAE sovereign fund and the largest mainstream exchange in the cryptocurrency circle is expected to further promote the development of the cryptocurrency industry in the UAE. Therefore, in the long run, the prospects for the development of encryption in the Middle East are indeed worth looking forward to.
In short, the UAE Foundation or DAO organization is also an optional coin issuer. However, the cost of registering a foundation or DAO in the UAE will be relatively high, so it is more suitable for projects of a certain scale.
5. If you choose a US foundation as the issuer of the RWA project, what risks and bottlenecks should you pay attention to?
First of all, issuing tokens in the form of a foundation in the United States requires obtaining a corresponding license, such as the MSB license issued by the Financial Crimes Enforcement Network (FinCEN).
Secondly, due to the tense geopolitical relations between China and the United States, the United States' regulatory attitude and intensity towards offshore companies often change, which will bring uncertainty to the company's long-term compliance operations.
In addition, the U.S. commercial laws related to finance and companies are extremely complex and require a systematic understanding of federal and state laws, so achieving compliance is difficult and complex.
Finally, the tax audit by the US tax agency (IRS) is very strict. As the American proverb says: in one’s life, only death and taxes are inevitable. Therefore, when setting up a foundation in the United States, a professional tax planning team is required to support and handle related tax issues. Otherwise, the corporate affiliates are at risk of being affected by the long-arm jurisdiction of the United States.
6. Crypto Salad Interpretation
At a time when the regulatory outlook for the global cryptocurrency industry remains unclear, Chinese project parties must adhere to the principle of "compliance first" when implementing RWA projects. Therefore, RWA project parties need to actively cooperate closely with a professional cryptocurrency industry lawyer team to jointly promote the implementation of the project.
