Celsius crisis and the hated accredited investor laws – Cointelegraph Magazine

Accredited investor laws are the bane of many in the crypto industry, who see them as preventing small investors from accessing big opportunities. When Celsius was recently forced to cut off access to U.S. citizens who were not accredited investors, many cried foul.

Did it help some users avoid the current crisis? Or do accredited investor laws go too far in saving users from themselves — and from profits, too?

Two weeks ago, as speculation about Celsius’ solvency began to mount, users started experiencing trouble withdrawing money from their accounts. Though Celsius CEO and founder Alex Mashinsky appeared to initially write the issues off as baseless rumors, the company soon announced a “temporary halt” on withdrawals. Users were — and, as of the time of writing, remain — unable to access their funds, which are, at least in theory, still earning interest.

Magazine had interviewed Mashinsky about investor accreditation on May 25 before Celsius ran into serious problems in the public area. The resulting drama makes the topic all the more timely. So, what does Mashinsky have to say about accredited investor laws?

Papers, please

Those even casually researching early investment opportunities — crypto or otherwise — are sure to have encountered queries about their “accreditation” as investors. How exactly does one get accredited, and why does it matter — after all, why should anyone need to get permission to invest their own money?

Roughly comparable accredited investor laws exist in many jurisdictions around the world, but nowhere do they appear to be as serious and prominent as in the United States, where the minimum threshold to be allowed to invest in many opportunities calls for $1 million in investable assets beyond one’s primary residence or annual income exceeding $200,000. A brief study of United States-based private investment funds might lead one to conclude that investment opportunities unavailable on the stock market are not meant for the commoners, who, by definition, lack accreditation.

The US Accredited Investor law discriminates & takes opportunities to gain wealth away from >90% of the population. The governments reckless printing & mismanagement of money has created inflation of 8.5% & this law makes sure only the excessively wealthy can hedge against it.

— Scott Kirk (@ScottKirk7) April 12,…