Coinbase CEO Brian Armstrong is calling for a major rewrite of U.S. accredited investor laws, arguing the current rules effectively shut everyday Americans out of the biggest financial gains. In a statement, Armstrong said companies now stay private far longer than they used to, meaning retail investors can only buy in after the upside is gone.
The core complaint
Armstrong’s central argument is that the accredited investor threshold — which requires a net worth of at least $1 million (excluding a primary residence) or an annual income above $200,000 ($300,000 for couples) — was designed decades ago when companies went public much sooner. Today, many startups remain private for years, sometimes more than a decade, while their value skyrockets. Only wealthy individuals and institutions get to participate in those early rounds. By the time a company lists on a stock exchange, Armstrong said, the biggest returns have already been captured.
The critique comes as private markets have ballooned. More companies are staying private longer, and the number of unicorns — startups valued at over $1 billion — has surged. Meanwhile, the accredited investor definition has not been meaningfully updated since 1982, aside from an inflation adjustment in 2020 that actually made the threshold slightly harder to meet for some. Armstrong’s call is the latest push from the crypto industry to broaden access to investment opportunities that have traditionally been reserved for the wealthy.
What a change could look like
Armstrong did not lay out a specific legislative proposal, but he suggested that the rules should be based on financial literacy or a simple knowledge test rather than net worth. Other proposals circulating in Washington include allowing investors to self-certify their status or raising the income and wealth thresholds to account for inflation. The Securities and Exchange Commission has also been studying the issue, but no formal rulemaking has been announced.
Pushback and hurdles
Critics of loosening the rules argue that the accredited investor framework exists to protect ordinary people from high-risk, illiquid investments that can wipe out savings. They point to the many startup failures and fraud cases in private markets as evidence that the guardrails are needed. Armstrong acknowledged the risk but said the current system is too paternalistic and that adults should be able to make their own investment decisions with proper disclosures.
The debate is likely to intensify as the SEC considers whether to update the definition. For now, the agency has not signaled any immediate action, and any change would require either a rulemaking process or an act of Congress. Armstrong’s comments add pressure from the crypto sector, which has long argued that the rules stifle innovation and limit access to wealth-building opportunities.
