• SEC searching for ways to expand accredited investor classification
• The federal regulator is looking for comments from the public on how to go about with the amendment of its accredited investor scheme.
• Accredited investors must have a net worth of $1 million or be an entity handling no less than $5 million in assets.

Cryptocurrency News Today – According to the SEC, an accredited investor is an individual who has a net worth of no less than $1 million. An accredited investor is an executive at the entity making the offering. The term can also be classified as an entity controlling about $5 million in assets. Now the SEC is looking for ways to amend this initiative. The U.S federal regulator has announced the decision not minding the potential implications for capital creation of firms that are hesitant to meet the complete public reporting obligations.

What we need to know about the Amendment and who Deserves Accreditation

The SEC says it is looking for public comments on amendments to its accredited investor classification. There has been a long-standing controversy regarding who falls into the category of an accredited investor. The SEC’s exemptions are designed to give companies the option to offer shares to investors without meeting the complete filing demands issued by the SEC regarding companies listing publicly.

It is designed to protect investors from predatory offerings. However, criticism against the classifications indicates that the exemptions only ensure that the rich become richer while stopping main-street investors from wealth creation. The new amendments would give new investors’ access to the classification, including investors whose certifications and professional qualifications suggest that they know enough about investing in private offerings. In a similar fashion, “knowledgeable employees” may be given similar access to their companies’ offerings as executives have.

What do These Exemptions Mean for Cryptocurrency?

Per a concept release on the matter of simplifying exemption filings, the Securities and Exchange Commission estimated that in the year 2018, investors raised no less than $2.9 trillion under various exemptions. This led to the dwarfing of $1.4 trillion in offerings registered under the SEC. The classification of an accredited investor can also apply to exemptions 506(b) and 506(c), which are under Regulation D.

From a previous report, the SEC said firms raised no less than $1.5 trillion in exempt offerings using 506(b) alone back in 2018. Now that the SEC has chosen to expand its objective of clamping down initial coin offerings (which it determines to be illegal offerings) today, Blockchain of Things must return the $13 million raised in their recent ICO. Telegram wanted to use 506(c) for its $1.7 billion offering worth of TON tokens. The company accused the Federal regulator of irresponsible delays regarding processing Telegram’s Reg. D filing.