The SEC Chairman reveals opening private funds for individual investors.

The chairman of the Securities and Exchange Commission (SEC) Paul Atkins stated that the agency will cooperate with the administration of President Donald Trump to expand opportunities for individual investors to access private investment opportunities, including private equity funds (.

Atkins cites the recent executive order by Donald Trump allowing the inclusion of cryptocurrency and alternative assets in 401(k) retirement accounts — a type of retirement account that benefits from tax advantages, funded by contributions from individuals and employers — as a catalyst for this move.

Speaking on Fox Business on Saturday, Mr. Atkins said:

"It is unreasonable that large funding pools and state pension funds can diversify portfolios in both public and private markets, while 401)k( accounts cannot. One of the goals of this executive order is to direct the Department of Labor and SEC to work together to make that a reality."

However, he also emphasized the need for caution and to establish "appropriate protective barriers" for alternative asset investments. "We cannot simply fling open the door for investors to rush in without caution," Atkins said.

He stated that the SEC is prioritizing the development of a cryptocurrency regulatory framework to make America the global leader in digital assets. Expanding access to private investment funds could allow individual investors to participate in early-stage crypto projects and private token sales that are typically reserved for institutional investors or accredited investors.

Opportunities and Risks for Crypto Investors

The SEC reformed regulations regarding accredited investors in 2020, shifting the focus from net worth to financial knowledge and skills, thereby expanding the group of individuals who may qualify.

However, according to Christopher Perkins — the Chairman of the CoinFund investment fund — current regulations remain restrictive, preventing individual investors from accessing many attractive investment products.

The SEC believes that regulations recognizing investors play a role in protecting consumers, preventing them from bearing excessive financial risks. These risks are even greater in the private investment environment, where companies are not required to comply with strict disclosure requirements like publicly traded companies, demanding that investors have a deeper financial understanding.

In addition, private investments are often illiquid. In the event of a financial crisis, over-leveraged investing or misallocation )malinvestment( can trigger a chain reaction, spreading to other asset types and markets.

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