Brian Armstrong thinks the US government has been gatekeeping investment opportunities behind the wrong metric. Instead of asking how much money you have, he argues, regulators should ask whether you actually understand what you’re doing with it.

The Coinbase co-founder and CEO posted on X in mid-June calling for an overhaul of the accredited investor rules, describing the current wealth-based thresholds as a “regressive tax” on everyday investors. His proposed fix: a merit-based financial literacy test that would let anyone, regardless of net worth, access the kind of early-stage private market deals that have historically been reserved for the already-wealthy.

The wealth test that hasn’t aged well

Here’s how accredited investor status currently works. You either need a net worth of $1 million (excluding your primary residence) or an individual income of $200,000, or $300,000 if filing jointly. Meet those bars, and you’re deemed sophisticated enough to invest in private placements, pre-IPO rounds, and other offerings that skip the full SEC registration process.

Armstrong’s frustration isn’t purely theoretical. Companies are staying private for far longer than they used to. By the time many tech and crypto firms eventually IPO, the lion’s share of value creation has already occurred in private rounds that most Americans can’t legally participate in.

What the test would actually cover

Armstrong outlined some of the topics he believes a financial literacy exam should address. These include core concepts like dollar-cost averaging, how to read financial statements, and strategies for managing market downturns.

The proposal also aligns with a concrete legislative effort already underway in Washington. The House passed the INVEST Act back in December 2025, which directs the SEC to develop a competency-based exam that would create an alternative pathway to accredited investor status. That bill is currently awaiting action in the Senate.

Over 200 crypto firms have reportedly expressed support for legislation aimed at broadening retail investor access.

Why crypto cares more than most

Token offerings and crypto fund structures frequently rely on Regulation D exemptions, which restrict participation to accredited investors. That means the average person can buy Bitcoin on Coinbase all day long but can’t invest in a promising crypto protocol’s private token sale.

If the INVEST Act or similar legislation eventually passes the Senate and becomes law, a larger pool of eligible investors means more capital flowing into private rounds for crypto projects, AI startups, biotech companies, and every other sector where early-stage investing has been a rich-person sport.

For crypto investors specifically, the trajectory of the INVEST Act in the Senate is worth watching closely.