SEC Makes ICO Token Sales More Inclusive, Not Enough For SEC Commissioner Hester Peirce

The United States Securities and Exchange Commission (SEC) has modernized its definition of an accredited investor to now consider not just an individual’s wealth, but their education to qualify for investing in cryptocurrency ICOs, as well as mainstream capital market offerings.

The US SEC has broadened its definition of “accredited investors” that qualify to take part in token sales of Initial Coin Offerings(ICOs) to include the consideration of a person’s education not just their net worth. Pro-crypto and blockchain SEC Commissioner Hester Peirce believes that the definition needs to be made even more inclusive and extended to "mom and pop" retail investors.

According official release on Aug. 26, the SEC’s new amendments to the definition are part of the Commission’s ongoing effort to “simplify, harmonize, and improve the exempt” offering framework creating more inclusion and opportunity while “maintaining appropriate investor protections and promoting capital formation.”

Under the old “accredited investor” definition, individual investors who did not meet specific standard of wealth “regardless of their financial sophistication”, have been denied the opportunity to invest in the United States’ multifaceted and vast private markets. The new definition applies to all capital market offering not just cryptocurrency token sale ICOs, and will also include native American and Tribal government entities.

SEC Chairman Jay Clayton said:

“For the first time, individuals will be permitted to participate in our private capital markets not only based on their income or net worth, but also based on established, clear measures of financial sophistication.”

While the rules for investment in capital markets and tokens sales of ICOs have become more inclusive, a document from the SEC states that they do not expect the number of eligible investors to increase significantly.

Crypto Mom Peirce Wants More Inclusion

Newly re-confirmed SEC Commissioner Hester Peirce, who is known for her forward thinking when it comes to regulation on innovation—thinks the new definition is not inclusive enough.

In a Tweet following the announcement, Peirce wrote:

“Americans shouldn’t have to ask the SEC for permission to invest, but today’s accredited investor rule at least offers people a path to ask permission based on their education rather than simply telling them ‘no, unless you’re rich.’“