Today, the SEC released a proposal to loosen accredited investor requirements which will increase access to unregistered securites. Traditionally, for a person to become an accredited investor they either had receive annual income higher than $200k or have greater than a $1 million net worth. If the proposal succeeds, SEC requirements may change to allow people with certain certifications or education to become accredited investors.
Becoming an accredited investor allows individuals to invest in things like private equity, hedge funds, venture capital, and equity crowdfunding. Some feel like forbidding average citizens to have access to these types of investments is akin to discrimination while others believe opening the gates would help pump markets and foot the bill to newcomers.
SEC Chair Jay Clayton believes that modernization 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”
Potentially, all it would take is a bachelors degree to participate in an unregistered securities market.
Crypto Twitter has reacted quite positively to this announcement, as they tend to have a liberal outlook on open finance. Anthony Pompliano, who is essentially a spokesperson for Bitcoin in mainstream media, tweeted about the event.
“This is a step in the right direction. We must stop discriminating against 80%+ of Americans based on wealth.”
I believe that a reason crypto is such a popular investment within young demographics is because it allows them freedom that the government tries to take away from them. Not to say all of the freedom is safe, but young people with an internet connection don’t like to be censored. This is why you have tons of college aged students trading crypto with leverage, day trading it and investing in projects that don’t have great fundamentals.
This proposal offers nowhere near as much freedom as the crypto space does, but they are obviously trying to find a balance in this new world. We will update this article as the story progresses.