Accredited Investor Checks

The State of RWAs Today

As tokenized RWAs rise in popularity, platforms must comply with securities laws, verifying that investors meet accredited status. Civic provides a secure, privacy-preserving solution, enabling platforms to issue Custom Passes for Accredited Investors based on trusted third-party verifications.

Tokenization is the process of converting ownership of real-world assets like real estate or private equity into digital tokens, enabling fractional ownership, improved liquidity, and global investor access.

What is an Accredited Investor

As of 2024, to qualify as an accredited investor under U.S. regulations, an individual must meet one of the following criteria:

• Have an individual income exceeding $200,000 (or $300,000 with a spouse) in each of the last two years, with the expectation of reaching the same level in the current year.

• Have a net worth of over $1 million, excluding the value of their primary residence.

• Hold professional certifications, such as the Series 7, Series 65, or Series 82 licenses, which demonstrate financial expertise.

When Do RWAs Require Accredited Investor Status?

Tokenizing Real World Assets (RWAs) in industries like real estate, private equity, and infrastructure opens up fractional ownership and new markets, but regulations often restrict participation to accredited investors. Common cases where accredited status is needed include:

Real Estate: Fractionalized real estate, like shares in properties or funds, requires accredited investor verification due to the investment's complexity and long-term nature.

Private Equity & VC: Tokenizing private equity or venture capital stakes necessitates accredited investor checks due to private placement regulations.

Renewable Energy Projects: Tokenizing renewable energy infrastructure requires accredited investors due to the capital-intensive, securities-based structure.

High-Value Collectibles & Commodities: Tokenizing valuable assets like art, precious metals, or natural resources may require accredited investor verification.

Civic Custom Pass for Accredited Investors

Civic’s Custom Pass for Accredited Investors provides a seamless, privacy-first solution for verifying accredited investor status and managing access to tokenized offerings. The process integrates smoothly into platforms, ensuring regulatory compliance and simplifying investor onboarding.

Here’s how it works:

1. Initial Verification: Platforms conduct accredited investor checks using their own chosen third-party verification services, such as verifyInvestor or InvestReady*.

2. Submission to Civic: The platform submits the accredited investor verification results to Civic.

3. Civic Pass Issuance: Upon successful verification, Civic issues a Custom Pass for Accredited Investors, a blockchain-based credential that verifies the identity of the investor, ensuring they are the same individual who was confirmed as accredited by the third-party service.

4. On-Chain Validation: The Custom Pass can be used to gate smart contract functions, ensuring that only accredited investors can buy, sell, or transfer tokenized assets.

5. Ongoing Compliance: The Custom Pass can be updated or refreshed over time to ensure that the investor’s accreditation remains valid as regulations require.

A Real-World Example:

A tokenized real estate platform allows accredited investors to purchase fractional ownership of a commercial building. The platform uses verifyInvestor to check the investor’s accreditation. Once verified, Civic issues a Custom Pass for Accredited Investors, allowing the investor to participate in the offering and future opportunities without re-verifying their status.

How Can Civic Help?

• Frictionless Onboarding: Civic simplifies the accreditation process by relying on trusted third-party services. Once verified, investors can reuse their Civic Custom Pass across multiple platforms, reducing onboarding time and costs.

• Regulatory Compliance: Ensure that only accredited investors participate, meeting securities regulations in key jurisdictions.

• Privacy and Security: Civic safeguards sensitive data, ensuring a privacy-preserving process while keeping credentials secure.

Get In Touch

If you’re ready to simplify investor onboarding and meet compliance standards for tokenized Real World Assets, contact us.

* Disclaimer: Civic is not affiliated with these third-party services, and platforms should conduct their own due diligence when selecting verification providers.