STOs & Accredited Investors – Must You Be Wealthy to Participate?

by | Jun 17, 2019 | Money and Finance

While many investors are inspired by security token offerings (STOs) as potentially amore stable, regulated financial instrument for the future, other investors dislike them. The detractors see STOs as something only available for a small minority of investors.

The qualifications to become an accredited investor for an individual are: having a yearly salary of more than $200,000 a year for the previous two years (or $300,000 combined with a spouse); or having $1 million of net worth, not including the investor’s primary residence. This applies for STO accredited investor status as well.

Security Tokens are in Demand in the Market
Reports and opinions within the crypto industry are pointing to 2019 as the banner year for security tokens. The commercial and real estate centers of the world are gradually adopting higher technological forms of capital-raising. Industry trends are leaning toward a future where tokens are solidly connected to real assets.

The market’s movement toward tokenization is arguably creating an exclusive group of investors permitted to participate in the U.S. These individuals are referred to as accredited investors.

Only Accredited Investors?
Less than 7% of American households can qualify asaccredited investors under current laws. As an increasing number of projects are only open to accredited investors, severe limits on the pool of investments within the market may be created..

In conclusion, while STOs are growing in popularity and offer many benefits, investors should be mindful of the STO accredited investor requirements when seeking to participate.

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