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ManhattanStreet-ICO(TM) Program

What is an ICO?

An ICO is a new type of capital raising method for startups based on digital blockchain technology.

ICO means Initial Coin Offering. It’s a process where a company creates and sells its own specialized Tokens (generally) in exchange for payment in Bitcoin, Ethereum and other digital currencies (also called cryptocurrencies), with the purpose of raising capital to build a startup business. As a result, the company collects capital to fund the product development and marketing of their business, and the investors receive new specialized Tokens. These Tokens are developed with specialized functions built in, that enable innovative new blockchain based capabilities.

Are ICOs legal in the US?

In early August of 2017 the SEC made it clear that in most cases Initial Coin Offerings are considered by the SEC to be securities transactions, so the existing body of SEC regulations apply fully to them. This announcement by the SEC reduced uncertainty for US entrepreneurs planning ICOs but presents them with the challenge of figuring out how to make their ICO conform to the SEC securities regulations.

How to conduct ICOs that conform to US SEC securities regulations;

There are two primary SEC Regulations that are well suited to raising capital through the sale of securities to investors online. They are Regulation A+ and Reg D 506C. These rule systems are used widely and are well understood. Either one of them can be used with ICOs, as long as the ICOs are carefully developed with compliance to these rules built in. Reg A+ is a more natural fit because it allows investors of all wealth levels anywhere in the world to invest, which is one of the highly appealing aspects of ICOs.

By clicking this link, you can see an interactive webinar about compliant ICOs.

In the investment process companies can use the usual Smart Contracts, and the new SAFT (Simple Agreement for Future Tokens).

Reg A+ and Reg D 506C are not a panacea. They offer a legitimate method for ICOs to be made for US companies when care is used.


- Allows companies to raise up to $50 mill from investors of all wealth levels worldwide.

- Ability to accept investment from non-accredited investors.

- Already defined Anti Money Laundering check for all investors included

- Up front SEC legal filing required (offering of securities to investors is not allowed until the SEC Qualifies the Form 1-A filing), this takes time and involves upfront costs.

Tier 1 level offers some advantages for raises of less than $20 mil.

- The purchased tokens are liquid, the buyers can sell them immediately in many cases.

- Note that implementing an ICO so that it conforms to Regulation A+ can be complex and must be approached in a thorough manner with advice from expert securities attorneys.

Click here to see the timeline for the Tier 1 Reg A+ICO

Click here to see the timeline for the Tier 2 Reg A+ICO


- Regulation D 506c is the form that is most suited.

- Can use an SAFT, which is a type of convertible note, to raise capital before the Tokens exist. Subsequently the notes are converted into investments in Tokens through the Reg D

- Generally no fixed cap on how much capital can be raised.

- Only accredited investors are allowed to invest.

- The offering company has to take reasonable steps to verify that its investors are accredited. Manhattan Street Capital assists with this step.

- The Reg D Form D must be filed with the SEC, but this is a simple filing, not a lengthy process. Much shorter process - a few days to file.

- The Tokens bought by investors are not liquid and can only be sold to accredited investors, unless a liquidity event such as an IPO occurs. These restrictions must be built into the ICO.

- Note that implementing an ICO so that it conforms to Regulation D can be complex and must be approached in a thorough manner with advice from expert securities attorneys.

Click here to see the process and summary time schedule for a Reg D ICO.

Bitcoin, Ether and other Cryptocurrencies Now accepted on Conventional Offerings

Manhattan Street Capital now enables companies conducting conventional offerings to (at their option) accept cryptocurrency; for example Bitcoin or Ether, as payment for investment, this applies to conventional Reg A+ offerings and Reg D offerings. Most companies making traditional offerings will choose to convert the digital currency payments into US dollars immediately upon receipt to avoid digital currency price/value fluctuations. Digital currency payments are offered In addition to other payment methods such as check, ACH, and wire transfer.

The addition of digital currency payments simply makes it easier for our company offerings to reach more investors around the world in a way that is convenient for the investor.

To see a flowchart for the cryptocurrency payment process click here.

If you are interested, Become a Member, or Check Your Company.



Rod Turner


Rod Turner is the founder and CEO of Manhattan Street Capital, the #1 Growth Capital marketplace for mature startups and mid sized companies to raise capital using Regulation A+. Turner has played a key role in building successful companies including Symantec/Norton (SYMC), Ashton Tate, MicroPort, Knowledge Adventure and more. He is an experienced investor who has built a Venture Capital business (Irvine Ventures) and has made angel and mezzanine investments in companies such as Bloom, Amyris (AMRS), Ask Jeeves and eASIC .



Manhattan Street Capital, 5694 Mission Center Rd, Suite 602-468, San Diego, CA 92108.



JasonK on September 21
Hi Rod, Great article and response to the SEC note that was recently published. If a company raises funds through Reg A+, can it list immediately on any ICO exchange or does it have to be an SEC regulated exchange? And are there any such regulated exchanges at the moment designed for ICOs?

Rod Turner on September 28
Hi Jason The first two SEC intended to be compliant regulated exchanges have announced, although they are not yet open, the first by Overstock.com. SEC-regulated exchanges are the best for US investors. US investors that sell through a US exchange can only use an SEC-approved exchange. Where Tokens can be traded post-Reg A+ ICO will depend on the specifics of the offering. If a Tier 1 Reg A+ is used, then the Tokens can only be sold in the States in which Blue Sky filings have been completed (if any were set up) and in countries outside the US, for example. The Token re-sales must be restricted in the Smart Contract and in the Token programming so that they will only occur in the circumstances that the Reg A+ provided for. Tier 2 Reg A+ is generally easier than Tier 1 in this regard, but there are still significant choices to be made which influence where the Tokens can be sold. International purchases of Tokens are a part of Reg A+, and those purchasers, as well as potentially the US purchasers, can sell their Tokens on non-US exchanges. We can introduce you to an attorney for detailed legal advice. International purchases of Tokens are a part of Reg A+. For Reg D and Reg S the situation is different.

Rod Turner on October 02
Jason, I just realized you may have been asking a different question than the one I answered! If you meant to ask where can an ICO company make or offer it's listing when the Reg A+ itself is being offered to buyers/investors, then this is my answer: Reg A+ allows companies to make their offerings with online platforms like Manhattan Street Capital (we have some Reg A+ ICOs coming soon), and with broker-dealers, and with their own website and with ICO type sites that adhere to the reg A+ rules. It is important (wherever a Reg A+ ICO is offered), that the offering follows all the rules in Reg A+. So for example, each investor must be checked using the Anti-Money Laundering List test, and there are strict rules regarding legal disclaimers and about prominent display of the Offering Circular to all prospective investors. And more. The rules are reasonable. Check our FAQ for more help. https://www.manhattanstreetcapital.com/manhattan-faq-page

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