Read the definition of locked units before you read the duration. Most attention goes to the number of months, and in my experience the clauses that decide what a holder can actually do are the scope definition, the transfer carve-outs, and the amendment terms. Whether you may move units into a trust is one sentence that either exists or does not.
Part of our guide: Family Office.
The short version
- The agreement has to say which units are locked, and whether units acquired later (rewards, airdrops, later purchases) fall inside the restriction.
- Release runs on time, on events, or on both, and event-based release hands the clock to whoever controls the event.
- The estate-planning carve-out has to be drafted in, and the transferee normally signs a joinder for the remaining term.
- Amendment and waiver terms decide whether the schedule moves after you sign, including extension.
- A contract release only clears the contract. Securities-law and on-chain restrictions run on their own clocks.
What the agreement actually captures
Start with the defined term, which does more work than the schedule attached to it: a fixed quantity, a described tranche, or a class worded as all units beneficially owned, now or later acquired. The third shape is common and the one people misread, because it captures things that have not happened yet.
Work through what could land inside a class definition: staking rewards, airdrops to the locked class, units bought on the open market years later, units from a subsequent round, a fork that hands you a second asset. Ask for each by name.
Then read who counts as the holder. Attribution language commonly reaches entities you control, immediate family, and trusts you benefit from, so an LLC or trust you already use can be captured without being named.
Release, and the three separate clocks
Time-based release is a cliff plus a schedule. Event-based release ties the same fractions to a listing, a mainnet milestone, or a financing. The difference is control: a date arrives on its own, an event arrives when somebody makes it arrive. Where that somebody is the issuer, ask for an outside date on which release begins whether or not the event occurs. IPO lockups, the model these borrowed from, most commonly run 180 days (Investor.gov). The months around them are their own exercise: planning before a token unlock.
That contract clock is one of three. The second is regulatory, and I will not tell you whether a particular token is a security: that determination is fact-specific, actively litigated, and I would be wary of anyone who answers it quickly. It still changes what the release date means. Units that are securities acquired from the issuer outside a public offering meet a federal definition on their own terms:
“Securities acquired directly or indirectly from the issuer, or from an affiliate of the issuer, in a transaction or chain of transactions not involving any public offering”
Rule 144’s conditions then run alongside the private contract, on a holding period measured from acquisition rather than contract release, and clearing a restrictive legend needs the issuer’s cooperation (Investor.gov, Restricted securities).
The third clock is tax, and it usually runs earliest. The IRS treats digital assets as property (IRS, Digital assets), and where property transferred in connection with services carries a substantial risk of forfeiture, 26 U.S.C. § 83 governs when income is recognized. An election under § 83(b) must be made “not later than 30 days after the date of such transfer,” measured from transfer with no regard for the unlock date. Your restrictions feed the same test, since rights count as transferable only where the transferee takes them free of that risk (26 CFR § 1.83-3(d)). Raise it with your CPA and attorney before signature; the downstream side is token sale tax planning.
The carve-outs, and why they are cheaper before signing
Read past the word “sell.” Restriction language typically covers sale, transfer, pledge, hypothecation, encumbrance, lending, and derivatives with similar effect. A pledge prohibition closes off a borrow against the position for the duration, even without a sale.
The carve-outs worth asking for: transfers to a trust for estate planning, to an entity wholly owned by the holder, to immediate family as defined in the document, and by will or intestacy.
Each carries a condition, usually a joinder: the transferee signs the same agreement and takes the units still restricted for the rest of the term. Ask whether your trustee will sign, because a corporate trustee is being asked to hold an asset it cannot sell under terms it did not negotiate, and some decline. The mechanics are in can founder tokens be transferred to a trust.
A death provision sits separately from an estate-planning one. Transfer by will operates only at death and does nothing during incapacity, which needs its own path through an agent or successor trustee.
The point I press hardest: that carve-out costs a sentence before signing, and issuers grant it routinely because the units stay locked and the beneficial owner stays the same. Afterward you are asking a counterparty with no obligation to say yes. Same clause, entirely different price. Reviewing a lock-up is never a route around a restriction you agreed to.
What can move after you sign, without you
Amendment. Some agreements are two-party. Others let the issuer amend with consent of a majority of locked units, so other holders can bind you.
Waiver. Read whether the issuer may release one holder without the others, and who holds that discretion.
Most-favored-nation. Read whether an MFN covers waivers as well as amendments, applies in full or pro rata, and carves out large holders.
Acceleration. Read the triggers, usually a change of control, a listing, or termination without cause, and whether it is automatic or discretionary.
What I actually see
Three patterns, one root: the reviewer read the schedule and skimmed the definitions.
The scope definition swallowed later purchases. The lock-up covered all units beneficially owned, then or later acquired. The founder bought more on the open market eighteen months on with unrelated money and assumed those were free. They had been captured from the day of purchase.
The permission existed and the mechanism did not. An agreement allowed transfers to a trust subject to a joinder, and the units sat in a vesting contract with one hardcoded beneficiary and no function to change it. The right was real and unexercisable.
Nobody read the amendment clause until it was used. The term was extended with the consent of holders of a majority of locked units, a mechanism the founder had signed at closing.
The check I would run before signing takes an hour. Highlight every defined term in the restriction sentence, then answer in writing: which units are captured today; which would be captured if I bought more tomorrow; what is prohibited besides selling; who may permit an exception; and who can change any of this without my signature. Anything the document cannot answer is a clause to negotiate. Then ask whoever will hold the units how a permitted transfer would be executed.
Where this goes wrong
The failures cluster at the seam between what the document permits and what anyone can do.
An estate-planning transfer is permitted on paper while the escrow agent has no procedure for it and the vesting contract has no function. A thirty-day election window closes while everyone is focused on a date years away. Rewards accrued during the lock inherit the restriction, so the position that looked liquid is a fraction of the balance. And a term extended by majority amendment resets a plan built on the original date.
The decision rule
Work it in this order, the order in which a missed clause is expensive.
- Read the definition of locked units first, then list every way you could hold more.
- Read the attribution clause against every entity and trust you already use.
- Map the schedule, marking dates that depend on another party, and ask for an outside date.
- Write the three clocks separately: contract release, securities restrictions, tax deadlines.
- Ask for the estate-planning carve-out in writing, covering trusts, owned entities, and family.
- Confirm incapacity is addressed separately from death, with a path for an agent or successor trustee.
- Check who can amend, waive, or extend, and whether any MFN reaches the holders who matter.
- Get the operational path in writing from whoever will hold the units.
Where this sits
A lock-up sits upstream of most founder decisions. It sets what is available and when, which drives liquidity event planning. It constrains estate planning, since a transfer the document forbids cannot be planned around. And it interacts with where the units are held, because the paragraph is only as good as the party enforcing it.
These questions cross professional boundaries, and the join is where they fail. The attorney negotiating the lock-up rarely writes your estate plan, the CPA sees the executed document after short deadlines have run, and the custodian holding the units has usually never read it. Nobody owns the seam, which is why the carve-out that exists on paper fails in practice. Put those parties on one call before signature.
Sources
- 17 CFR § 230.144, Rule 144 resale conditions
- 26 U.S.C. § 83, Property transferred in connection with performance of services
- 26 CFR § 1.83-3, Meaning and use of certain terms
- IRS, Digital assets
- Investor.gov, Initial public offerings: lockup agreements
- Investor.gov, Restricted securities
Related
- Can founder tokens be transferred to a trust?
- How should a founder plan before a token unlock?
- Token sale tax planning
- Token liquidity event planning
- Strategic exit planning for your crypto holdings
- Founder and token holder wealth
Last updated: 3 August 2026.
This article is general education, not legal, tax, or investment advice. Nothing here is an opinion about your lock-up or about whether any token is a security, and your own document controls. Talk to a qualified attorney about your own situation.
