TABLE OF CONTENTS
- What is an accredited investor?
- What is a qualified purchaser?
- How long does it take to complete accreditation?
- How do I show accreditation based on crypto assets?
- How do I accredit my company?
- How do I accredit my trust?
- Why is a credit report necessary?
- Why did my accreditation status "expire"?
What is an accredited investor?
Accredited investors meet standards defined by the US Securities and Exchange Commission which allow them to invest in certain private securities offerings. Most startups raising money do so from accredited investors only.
The SEC web site contains the full definition. In general, any of the following would meet the standard:
- Individuals with annual income over $200K (individually) or $300K (with spouse) over the last 2 years and an expectation of the same this year
- Individuals with net assets over $1 million, excluding the primary residence (unless more is owed on the mortgage than the residence is worth)
- An institution with over $5 million in assets, such as a venture fund or a trust
- An entity made up entirely of accredited investors
What is a qualified purchaser?
Qualified purchasers as defined by the US Securities and Exchange Commission are individuals with at least $5M in investments or funds with at least $25M in investments.
How long does it take to complete accreditation?
Accreditation can take up to 72 hours, though it’s usually much faster. You can see the status of your accreditation application here.
How do I show accreditation based on crypto assets?
In order to fulfill the accreditation requirements with your crypto-asset holdings, you can either Upload a screenshot from a credible cryptocurrency exchange or wallet showing holdings & valuations worth over $1MM USD. The screenshot should include the date and evidence tying the investor to the account (e.g. your name or the investing entity's name), or Upload a message cryptographically signed using the private key of your wallet or wallets, proving that you own assets worth over $1MM USD.
In either case, you will also need to provide documentation of your debts (e.g. via a credit report or letter from your accountant) in order to qualify.
How do I accredit my company?
In order to accredit your company entity with CoinList, you need to meet any of these following SEC requirements:
- upload statements showing net assets greater than $5m, dated within 90 days
- upload documents showing that all shareholders are qualified purchasers
- upload documents showing that all shareholders are accredited investors based on individual assets over $1m or income over $200k ($300k with spouse)
How do I accredit my trust?
In order to accredit a trust, you need to provide documents showing the trust's asset amount is over $5m. You can have your attorney or CPA write a letter attesting to this. Here is a set of templates that can be signed by them.
Why is a credit report necessary?
If you are providing evidence of your accreditation on the basis of having over $1 million in net assets, the company you are investing in is required to verify your debts in order to confirm that your net assets are greater than $1M. CoinList requests this credit report and includes only total debts (excluding mortgages) when verifying your accredited investor status.
Why did my accreditation status "expire"?
According to SEC rules, we must check your accreditation status every three months if you accredited based on net-worth, and annually if you accredited based on income.