To become an accredited investor you need to

• Earned income of more than $200,000 (or $300,000 together with a spouse) in each of the last two years and reasonably expects to earn the same for the current year, or
• Has a net worth over $1 million, either individually or together with a spouse (excluding the value of a primary residence).

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The accredited investor exemption seeks “...to ensure that all participating investors are financially sophisticated and able to fend for themselves or sustain the risk of loss, thus rendering unnecessary the protections that come from a registered offering,” the SEC says.

Basically, accredited investor can trade privately investments while non-accredited investor can only trade public things like stocks and bonds. And the SEC reason is that we are too stupid and that you shouldn't risk your money

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From https://www.blakeporterneuro.com/accredited-investor-requirements-are-ridiculous-ill-informed-and-should-be-amended-or-abolished/

nothing is stopping anyone over 21 from going into a casino with their paycheck and putting it all on 00 in roulette. A pensioner can pull slots till their monthly stipend is decimated. I could go on a daily fantasy sports site and bet my 1,000% annualized interest pay-day advance loan on a week of NFL games. Studies find that many people do not understand the odds of gambling yet they can participate in gambling (for review, Rogers 1998). There are also no regulations stopping someone from investing their life savings in sketchy, Over The Counter traded companies. For example, I can easily make an account with an online broker account, transfer over all my savings, and buy shares of public, maybe-legal Marijuana companies. Of course the SEC warns against these companies, but they are legal to invest everything you have in them.

However, I was not allowed to invest in the likes of Uber or Airbnb or Oculus Rift. Heartbreakingly I was not qualified to invest in Gimlet Media; an innovative podcasting company started by Alex Blumberg that, I think, is changing the landscape of podcasts. While starting Gimlet Media, the whole processes is documented in the podcast Startup, Gimlet Media opened up to crowd investing. The $1,000 minimum investment got a lot of people excited especially at a time when interest rates are near 0% and traditional savings accounts and Money Markets afforded nearly nothing. However, many listeners would go on to be devastated when they learned they had to meet the ridiculous accredited investor requirements. Securities and Exchange Commission, why am I allowed to gamble all of my money away in a myriad of ways but I’m not allowed to invest in a company I believe in? Maybe the risk many gambling mechanisms posses are structured and lack volatility so they are “safer”? Or maybe the revenue the government enjoys from casino taxes and fees and the taxing the poor via the lottery is too great to pass up. I’m not sure. (I do realize the SEC does not regulating gambling, in the traditional sense of the word).

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What does this have to do with crypto

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One of the biggest things the SEC tries to use against crypto is that it is possible these are securities, and this makes ICO illegal for 97% of citizens to invest in.

Like the SEC wants to make crypto as a security as we all know. This means they are a unregistered security. Accredited investors can invest into unregistered securities

And making it where everyone is an accredited investor doesn't work because those selling unregistered securities have to do diligence prior to sale to make sure the person is an accredited investor. Where as the abolishment on this laws removes this un-needed hoop if we were to make everyone an accredited investor anyways.

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Simply removing this part of the law from the books basically takes away the SEC power IN THIS ARGUMENT. Like there is other things the SEC does do, but this is the biggest thing the SEC tries to use against us.

If you want to check out the law on this that is causing this problem https://www.law.cornell.edu/cfr/text/17/230.501