What Does It Take to Be An Accredited Investor In the Crypto World?

An accredited investor is someone with a certain level of wealth or expertise that allows them to explore special investment opportunities most people can’t access —because they’re legally forbidden for the general public. Think of it as a backstage pass to private investments like startups, venture capital, and hedge funds.

To qualify, you usually need a net worth of over $1 million (not counting your home) or a yearly income of at least $200,000 for the past two years (in the US). Depending on where you live, the requirements and name may change a bit —like “sophisticated investor” in Australia and the UK, or “professional client” in the EU and Switzerland​.

The perks of being accredited? You get a chance to invest in unique, high-reward opportunities. These could be early-stage companies or alternative assets that aren’t available in public markets. However, these investments aren’t for the faint-hearted —they come with higher risks and often require tying up your money for longer periods.  Regulators require accreditation to ensure investors have sufficient financial knowledge and resources to withstand potential losses from high-risk investments. So, you’ll need to self-certify or show proof, like tax returns or certifications, to join the club​.

Accredited Investors & Crypto

Accredited investors became commoners in the crypto world following the 2017 Initial Coin Offering (ICO) boom, which saw a mix of innovative projects and outright scams. During this period, anyone could invest in ICOs (fundraising for new crypto projects/ventures) leading to a surge in interest but also many fraudulent or poorly managed projects that cost retail investors significant money.

To address these issues and face the multiple regulatory complaints worldwide, some crypto projects started prioritizing accredited investors. These investors, meeting specific income or asset thresholds, were considered better equipped to handle the risks of speculative investments and adhere to stricter regulatory requirements.

This shift also gave rise to more structured fundraising methods like Security Token Offerings (STOs) and Initial Exchange Offerings (IEOs). STOs, for example, involve tokens that are considered securities and comply with securities regulations, ensuring investor protection. However, participation often requires accreditation, limiting access to wealthier individuals or institutions. Similarly, IEOs, which are managed by exchanges, can vary in accessibility, but some platforms now prefer accredited investors to meet regulatory standards and reduce risks.

Over time, these changes have made the crypto fundraising (and investment) landscape more selective. While this has excluded some retail investors, it has also increased transparency and reduced the prevalence of scams, paving the way for a more secure and regulated environment.

Verification for Accredited Investors

This status is often self-certified, meaning you can declare your eligibility by providing documents like tax returns or salary proof. In some cases, verification services or financial institutions may review your information to confirm compliance with local regulations. No government agency formally grants this status, so individuals generally confirm it through issuers of investments requiring accredited investor status​.

Proof of accreditation involves sharing documentation like financial statements, letters from licensed professionals, or tax forms. Services like VerifyInvestor simplify this process, providing secure platforms for uploading required evidence. These verification steps ensure compliance with regulations while protecting your privacy.

VerifyInvestor, indeed, is available to attest your accredited investor status easily through the Obyte wallet. A user-friendly chatbot (Accredited Investor Attestation Chatbot) can be found on the Chat – Bot Store menu of the wallet. If you consider that you meet the requirements of your region, this chatbot will be able to verify it for you —and reward you in the process. Once you complete your first attestation with this chatbot, you’ll receive a bounty of $79 in GBYTEs, Obyte’s native currency.

This way, and most of the time, you’ll only need to share the proof of the attestation itself, publicly available on the Obyte DAG. Your investments will be broader and full of new possibilities!

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