This post is also available in: esEspañol

A new bill is headed to the desk of President Trump after the U.S House of Representatives passed legislation that promises to make it easier for small businesses to access capital and spur economic growth for the middle-class. The bill is the third iteration of the JOBS Act of 2012, and is nicknamed JOBS 3.0 by those on the street. It consists of thirty-two individual laws and was passed almost unanimously, voting 406-6. Congressman from both sides of the aisle have worked on it, and the bill is receiving praise from policy pundits.

How does this bill affect the Blockchain community? In funding and participation abilities. Currently, companies launching Initial Coin Offerings and Security Token Offerings are limited in the United States. This new definition increases the number of American investors from 99 to 250 and creates a better definition of “accredited”

“Like the original JOBS Act, the Jumpstart Our Business Startups Act signed by President Obama in 2012, this 3.0 legislation is bipartisan recognition that middle-class investors and entrepreneurs need Congress to cut red tape impeding their ability to achieve the American Dream,” said John Berlau, Competitive Enterprise Institute senior fellow.

“The bill builds on the important reforms of the original JOBS Act, easing barriers for non-wealthy but experienced investors to buy into private stock offerings and freeing small and midsize public companies from the some of the most onerous mandates of Sarbanes-Oxley and Dodd-Frank,” Berlau said. “It’s urgent that the Senate complete work on this package and send to the president to be signed into law.”

One highlight of the bill is a change to the definition of accredited investor status in the US. An accredited investor is an individual that has authority to invest money into products not registered by financial regulators. Currently, an accredited investor is a person who possesses $1,000,000 in net worth (excluding primary residence) demonstrates income or joint income over $200,000 or $300,000, respectively. This minimum requirement excludes a majority of individuals. Current estimates show that only 8.25% of American households qualify as accredited.

JOBS 3.0 modifies the definition of accredited investors. In addition to those who meet the wealth requirements, education now plays a factor. “An individual determined by the Securities and Exchange Commission (SEC) to have qualifying education or experience” will be able to gain accredited investor status.

The new addition opens up a lot of unanswered questions. What does qualifying education or experience mean? The definition could be interpreted in a number of different ways. In a general sense, that could mean possessing a professional certification (such as a CFA) would be necessary to qualify. A stricter interpretation of the rule could require needing restaurant experience to make an investment in a restaurant, for example.

In the past, people have been critical of the restrictions to obtain accredited investor status. In an article titled “What Is An Accredited Investor And Is The Definition Fair?”, pseudonymous investment blogger Financial Samurai offers his solutions to the debate.

“1) Any person can invest in private offerings so long as they limit their total investments to no more than 20% of their net worth.
2) Any person who wants to become an accredited investor must pass an accredited investor exam, which tests a person’s investment knowledge.
3) A combination of the above two.”

With the imminent implementation of JOBS 3.0, and the vague language surrounding accredited investor status, these debates will become the norm as legislators try to apply the new definitions.