We're starting to see the use of cryptocurrencies as incentive compensation in executive and key hire employment agreements and offer letters.
In the case of tokens awarded subject to reverse vesting, we think companies and employees both need to be careful, above and beyond the normal care taken with restricted stock grants.
How credible is the value the employee is reporting to the IRS on the 83(b) election form? Does the value track with an ICO or is there a lag such that you are having to peg a market value, which can be extremely challenging.
Keep careful tabs on the date the grant is effective in the blockchain. You have a hard 30 day deadline from the time of grant to make your 83(b) election, and given the immutable nature of the blockchain the board will have to be absolutely precise about the record date.
If you miss the 83(b) election deadline, you will presumably have taxable income on the fair market value at vesting less the amount paid. Given the volatility in the cypto market, you could find yourself in the unlucky situation of having significant paper income in the eyes of the IRS, but not enough assets to liquidate if the value of your tokens has since tanked.
By the way, if the company is taking the position that the token is not a security or commodity or otherwise is not property subject to Section 83, be very, very skeptical. Fear may be appropriate.
This stuff is not for the faint of heart. As well as getting legal advice from a securities lawyer, you will need a good tax accountant who has thought through the potential pitfalls.