1/ Accredited investor rules are theoretically about protecting retail investors. For the crypto community, they’re more about self-determination and who gets to participate in the future. Thread 👇
2/ In the US, investor accreditation is based on existing financial status. Accreditation = $200,000 as an individual/ $300,000 as a couple for the previous 2 years OR having >$1m in net assets.
3/ Wealth as an barometer is presumably based on the idea that either 1) financial standing means they are sophisticated investors who understand the risks involved; or 2) that more dry powder lowers the risk of catastrophic failure.
4/ Of course, it doesn’t take much to punch holes in either argument. Accreditation doesn’t come with rules re:% that can be invested, so risk of total failure remains. On the idea that wealth = technical sophistication, history is littered with examples that prove otherwise.
5/ To put it mildly, the crypto community aren't big fans. In an interview with @crypto_bobby, @pomp extended his remarks from above and said that accredited investor rules as currently conceived run counter to the American Dream.
6/ @_Kevin_Pham has put the cost of accredited rules in more personal terms.
7/ @robustus pointed out the paternalism inherent in any accreditation rules where the government has a say in how adults get to spend their money
8/ @VitalikButerin, meanwhile, pointed out that not only do wealth-based accreditation rules enshrine plutocracy, but that they also make it more likely that small investors fall prey to schemes and scams because those are the only deals available to them.
9/ And this is the rub...As much as crypto has been a liberating force against accreditation in some ways, in others it has simply turned retail investors into the business model for professional investors.
10/ As crypto projects have gotten increasingly concerned about regulatory action, they’ve shifted their focus to using the tried and true Reg D exemption to raise in private sale rounds from exclusively accredited investors. sec.gov/fast-answers/a…
11/ These tokens are sold at a discount on the ICO or exchange listing price. Accrediteds are able to buy more cheaply and earlier than retail investors, and return their investment almost immediately by selling to them. This is the ‘Shitcoin Waterfall’:
12/ @ricburton put one of the problems with this scenario in a different context. Ultimately, people are looking for financial mobility and opportunity, and are limited by what they can put their money into.
13/ Nic too has pointed out that, unpopular though the opinion may be, protections *do* matter.
14/ What, then, is the alternative? A bill currently in the Senate would open the possibility of a knowledge/expertise-based approach to accreditation to complement the current wealth rules, which @propelforward summarized:
15/ For more on this argument @mickelse has written about the benefits of a FINRA test for investor accreditation
16/ Knowledge-based accreditation is an idea whose time has come. There are simply too many good reasons to do it, and too many solutions to any logistical problem associated with it. I wrote about this in @21Cryptos this month. 
17/ My maximalist friends will likely suggest the best way to participate in this transformative moment is to just buy Bitcoin and ignore the rest. They may be right (and certainly, many an alt holder is looking at their portfolio wishing for less diversification right now).
18/ But that still doesn’t answer the more fundamental question of whether we want to continue to enshrine a division that has as much or more to do with circumstance than capacity, or instead build pathways that lead to more self-determination and opportunity.
19/ Put that way, it doesn’t seem like much of a hard question at all.
