Armstrong urges overhaul of U.S. accredited investor rules

Brian Armstrong called for changes to U.S. accredited investor rules, arguing that income and net-worth thresholds keep retail investors from the biggest early gains in private markets.

In a post on X, Armstrong wrote: “time to revisit the accredited investor laws in the US.” He noted companies are staying private longer, leaving retail investors to buy after IPOs when much of the upside has already been captured. Under current SEC rules, an individual generally qualifies as an accredited investor with annual income above $200,000, $300,000 jointly, or a net worth over $1 million excluding a primary residence.

Armstrong proposed replacing the wealth-based test with a competency-based option, such as a financial literacy exam that would qualify people on knowledge rather than assets. He also suggested removing the accreditation requirement while keeping disclosure obligations and fraud enforcement.

A bill passed by the U.S. House in 2025 endorsed an examination-based path to accreditation, allowing investors to qualify by demonstrating financial knowledge rather than meeting income or net-worth thresholds.

Coinbase has expanded into tokenized securities, derivatives and onchain products that often require accredited investors for many private offerings. Loosening accreditation rules would widen the pool of potential customers for those products.

Supporters of reform say the income and net-worth tests are a blunt measure of investor sophistication and exclude financially literate but less wealthy individuals. They point to examples of prominent companies delaying public listings, where early private investors captured large gains before retail buyers gained access.

Consumer advocates and some regulators argue the thresholds protect inexperienced investors from illiquid, high-risk and sometimes fraudulent private offerings. Private placements typically carry less disclosure than public companies, and critics warn wider access could expose retail investors to losses they cannot absorb.

Armstrong and other Coinbase executives have met with U.S. lawmakers to discuss crypto policy and regulatory clarity. He has argued that clearer regulation can benefit Coinbase because of the company’s compliance-focused model. The debate over accreditation remains active among lawmakers, industry groups and consumer advocates.