Crypto leaders on the outs over SEC’s latest decision
Though some crypto experts are in support of the SEC’s ‘accredited investor’ move, others claim that the move does not go far enough
The US Securities and Exchange Commission (SEC), on Wednesday, announced amendments for the definition of accredited investors. Some in the crypto community feel that it was the right play and have given positive feedback whereas, others feel that it falls short.
What is an accredited investor?
An accredited investor is a person (or a business organisation) allowed to trade securities that are not registered with the relevant financial bodies. They get privileged access by satisfying a criteria that involves meeting some requirements on professional experience, asset size, net worth and even governance status.
For an individual to become an accredited investor in the US, they would need an annual income of more than $200,000 and a net worth of over $1 million. These investors get access to private financial markets that are otherwise unavailable to the public.
The new ‘Accredited Investors’ definition
Recently, the commission adopted new rules regarding accredited investors. The amendments allow individuals holding certain licenses to become accredited investors, thus broadening the existing definition. This definition unlocks doors to people looking to invest in security token offerings and other options in the crypto space.
A number of industry experts feel that this broader definition will likely benefit “Wall Street insiders” most. Some of those who have made public their opinions against this definition include Andrew Hinkes, who expressed via Twitter, that it was “Not meaningful at least not yet”.
Hinkes also directed attention to a reference by the SEC, where it acknowledges that the broadened definition may not significantly build the accredited investors’ pool.
Those in support, on the other hand, include Hester Pierce, who approved but lobbied for lowering the barriers to private markets. Another renowned figure in favour of the decision is Gemini CEO Tyler Winklevoss.
Winklevoss shared via a tweet, “Kudos to the SEC for acknowledging that a penniless GenZ’er can be just as sophisticated an investor as a Wall Street Boomer. Wealth does not equal investment acumen, look at how the Wall Street ‘experts’ missed the #Bitcoin rocket ship.”
Others in favour of the changes include Zcoin founder Poramin Insom, Trading Platform Uphold Chief Revenue Officer Robin O’Connell and Bitcoin educator Anthony Pompliano.