SEC’s new investor rules will make ICOs easily accessible and people can invest in early token sales in a simple manner so let’s find out more in the crypto news today.
SEC’s new investor rules will allow educated and low-income individuals to invest in crypto ICOs by providing their credentials as the commissioner Hester Peirce believes that the rules will not be broadened further to include “mom and pop” investors. The US Securities and Exchange Commission has expanded the definition of “accredited investor “ which is a change that could allow more investors to participate in crypto ICOs.
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": https://t.co/uP9zo8pVkZ
— Hester Peirce (@HesterPeirce) August 26, 2020
With the new US regulations, only the accredited investors are allowed to purchase crypto from token sales and ICOs. In the meantime, the general public can trade any given cryptocurrency on an exchange after the ICO concluded. This means that wealthy investors have access to early investment opportunities. The new rules mean that individuals can become accredited investors by proving their “experience, knowledge, and certifications.” It doesn’t seem that anyone can be eligible to participate. The document from the SEC states that it doesn’t expect that there will be more eligible accredited investors than they are right now. Critics believe that the new rules will continue to benefit the members of the industry.
Hester Peirce, the pro-crypto commissioner, suggested that the rules should be broadened further as she wrote:
“Why shouldn’t mom and pop retail investors be allowed to invest in private offerings?”
Peirce noted that the SEC has limited the definition of accredited investors to wealthy investors to order and to protect the investors on the grounds that wealth is proof that investors can withstand a lot of losses. But, one person’s net worth doesn’t demonstrate financial sophistication she believes. She also takes issue with the SEC’s approach to evaluate accreditation. The public will be able to propose certifications for eligibility as Peirce says she has concerns about the SEC evaluating special education programs. The approach will force the SEC into “choosing winners and losers among the educational institutions.”
It should be noted that the new regulations by the SEC don’t apply to ICOs only. They also apply to all of the private investments such as IPOs but the news has more meaning to the crypto community which believes that the investments should be open to all of the accredited investors.
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