Can a high minimum investment verify accredited status under 506(c)?
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It can. In March 2025, SEC staff said a high enough minimum can be a reasonable step to verify under Rule 506(c): at least $200,000 for a person or $1 million for an entity, plus written statements that the investor is accredited and that the money isn't financed by someone else, with nothing you know to the contrary. Below that, you verify the usual ways: tax returns, statements, or a letter from a CPA or lawyer.
Everything here is for educational purposes only and is not legal, tax or investment advice, or an offer to buy or sell any security. Laws and thresholds change and depend on your facts, so talk to a qualified attorney before acting.
Key facts
- SEC staff no-action letter, March 12, 2025.
- Minimum: $200,000 for natural persons; $1,000,000 for entities.
- Written representations: accredited, and not financed by a third party for the investment.
- No knowledge of facts suggesting otherwise.
- This is staff guidance, not a rule change.
Transcript
Operator: This investor proved they're accredited with one check. No tax returns.
Founder: Wait. The check is the proof?
Operator: It can be. In March 2025, SEC staff said a high enough minimum can do the job under 506(c).
Operator: For a person: at least $200,000. For an entity: at least $1 million.
Founder: That's it?
Operator: Plus they confirm in writing that they're accredited, and that the money isn't financed by someone else.
Operator: And you can't know anything that says otherwise.
Founder: So no more tax returns.
Operator: Not at that minimum. Below it, you verify the old way: tax returns, statements, or a letter from a CPA or lawyer.
Founder: So the check is the proof.