Most individual investors are not considered to be accredited investors. Recent investigations have shown that scammers are using the accredited investor status as a way to scam victims out of cryptocurrency and their hard-earned cash.

Investment companies who do have processes that are different than full disclosure of the investment can only work with accredited investors. Investment companies that have these processes must either provide significant investor protections or work with accredited investors. These types of investments are usually in companies such as private companies, hedge funds, private equity funds, and venture capital funds that are typically not available to non-accredited investors.

What is an accredited investor?

An accredited investor is someone who has sufficient knowledge and expertise regarding a particular investment and does not need to proceed with investor protections in place. They are self-sufficient enough to handle a large monetary blow. Typically accredited investors are individuals with a high income of over $300,000 or a net worth of over $1,000,000. Additionally, they may have professional certifications such as a General Securities Representative license, Investment Adviser Representative license, or a Private Securities Offerings Representative license.

Scammers don’t want to provide investor protections

To the scammer, everyone qualifies as an accredited investor. Scammers will rely on the idea that you are not aware of the qualifications. Accredited investor status is meant to be a boost to your ego or a compliment by the scammer. They’re hoping you feel special by being considered an accredited investor, therefore you send them more of your money.

If an investment company is trying to claim that you are an accredited investor and you know that you are not, this is fraud. The scammer could also turn the tables later on and state that you defrauded them by falsely claiming to be an accredited investor. If this happens, they could simply take your fake investments under the disguise of federal law.

It’s important to understand the dangers that surround online investments and accredited investor status. If you are worried about your investments or an investment company, get good legal advice or contact a private investigator to conduct an online scam investigation. Investments are exciting, but only if they’re real.