Brian Armstrong thinks the US government has been gatekeeping investment opportunities behind the wrong metric. Instead of asking how much money you have, he argues, regulators should ask whether you actually understand what you’re doing with it.
The Coinbase co-founder and CEO posted on X in mid-June calling for an overhaul of the accredited investor rules, describing the current wealth-based thresholds as a “regressive tax” on everyday investors. His proposed fix: a merit-based financial literacy test that would let anyone, regardless of net worth, access the kind of early-stage private market deals that have historically been reserved for the already-wealthy.
The wealth test that hasn’t aged well
Here’s how accredited investor status currently works. You either need a net worth of $1 million (excluding your primary residence) or an individual income of $200,000, or $300,000 if filing jointly. Meet those bars, and you’re deemed sophisticated enough to invest in private placements, pre-IPO rounds, and other offerings that skip the full SEC registration process.
Armstrong’s frustration isn’t purely theoretical. Companies are staying private for far longer than they used to. By the time many tech and crypto firms eventually IPO, the lion’s share of value creation has already occurred in private rounds that most Americans can’t legally participate in.
