The U.S. Securities and Exchange Commission (SEC) has proposed changes to the definition of an accredited investor, potentially broadening access to private markets for individuals who do not meet current wealth-based criteria. The proposals, unveiled on September 30, 2026, aim to allow individuals to qualify as accredited investors through professional credentials or by passing a knowledge-based exam.
Currently, individuals typically qualify as accredited investors if they have a net worth of at least $1 million (excluding their primary residence) or have an individual income of $200,000 or a joint income of $300,000 over the past two years. The SEC’s proposed expansion seeks to introduce alternative pathways to accreditation.
One of the proposed new routes involves passing a knowledge-based exam. This exam would be administered by FINRA, consist of approximately 75 questions, cost around $100, and be valid for 10 years upon passing. The public comment period for these proposals is open until December 4, 2026.
Coinbase CEO Brian Armstrong has publicly supported the SEC’s initiative, framing it as a significant step toward increasing access to private markets for more Americans. SEC Chairman Paul Atkins has also emphasized the importance of expanding participation in private capital markets while maintaining safeguards against fraud.
Firms are increasingly staying private for longer periods, meaning a substantial portion of their value creation occurs before ordinary investors can participate in public markets. The SEC’s proposed changes could allow more individuals to invest in these early-stage opportunities, though the final form of the rules remains uncertain. The extent to which Coinbase might leverage these potential changes to facilitate tokenized offerings or pre-IPO investments is also a point of future development.
Why This Matters
The SEC’s proposal to expand the definition of an accredited investor aims to allow individuals to qualify through professional credentials or by passing an exam, potentially increasing participation in private markets. This shift could create new opportunities for companies like Coinbase, which has publicly supported the initiative, by potentially facilitating tokenized offerings and pre-IPO investments under a clearer regulatory framework. However, the final form of these rule changes and their exact impact remain uncertain.
Broader Context
For decades, access to private markets has been primarily determined by wealth. The SEC’s proposed changes introduce the possibility of a knowledge-based assessment as an alternative qualification, alongside existing wealth thresholds. This represents a potential evolution in how investor sophistication is evaluated for participation in private capital markets.
