The US Securities and Exchange Commission (SEC) yesterday announced plans to reevaluate and reform the accredited investor definition used today to determine access to digital asset trading and investing for US persons. The SEC voted to propose amendments that would seek to update and improve the definition to more effectively identify institutional and individual investors that have the knowledge and expertise to participate in our private capital markets.
In its announcement the SEC indicated that “the current test for individual accredited investor status takes a binary approach to who does and does not qualify based only a person’s income or net worth,” said Chairman Jay Clayton. “Modernization of this approach is long overdue. The proposal would add additional means for individuals to qualify to participate in our private capital markets based on established, clear measures of financial sophistication”.
This means we will likely see some leeway in the current definition of such investors and perhaps the digital asset trading and investing markets will become more accessible to US persons in general terms. Furthermore, it is interesting if blockchain projects or virtual currency exchanges still have a list of potential customers who were turned away as a result of not being to gain accredited status previously. The amendments to the definition could also automatically qualify such individuals to begin trading and investing.