The US Securities and Exchange Commission is proposing to let people into private markets based on merit rather than wealth alone, and Coinbase chief executive Brian Armstrong welcomed it publicly on October 11, 2026. In a post on X, Armstrong said it was great to see the SEC proposing merit-based private market access in the US and called it a huge step. His post is the basis for this article.
The detail worth sitting with is the word "merit." For decades, access to private securities in the United States has been gated primarily by the accredited-investor standard, which keys off income and net worth. A merit-based route would open the door to investors who can demonstrate knowledge or qualification rather than a bank balance. That is the shift Armstrong is reacting to.
The wall the proposal targets
Private markets cover a large slice of American capital formation: venture rounds, pre-IPO company shares, private credit, and many early-stage crypto and token deals that never touch a public exchange. Under the current framework, most retail investors are shut out of those offerings because they do not meet the wealth thresholds that define an accredited investor.
A merit-based test would change the gatekeeping logic. Instead of asking how much money you have, the standard would ask what you understand. The practical effect, if adopted, is that a larger pool of investors could qualify to buy into private deals that are today reserved for the wealthy and for institutions.
That framing is why a crypto executive cares. Many token and equity rounds in this industry are structured as private placements. A wider qualified investor base is directly relevant to companies that raise and distribute through those channels.
Coinbase's structural stake in the outcome
For Coinbase, the interest is structural, not rhetorical. The company runs a regulated exchange in the United States and has spent years pushing for clearer federal rules on who can access what. A rule that broadens private market participation enlarges the addressable market for the kinds of assets and offerings Coinbase and its peers want to serve.
Armstrong did not detail the specifics of the SEC proposal in his post, and we are not adding numbers or rule text that his statement does not contain. The verifiable facts here are narrow: the SEC is proposing merit-based private market access, and the Coinbase CEO publicly endorsed it. Everything beyond that about final thresholds, qualification tests, or effective dates is not yet established and should not be treated as settled.
A proposal is not a rule
The important caveat is timing. A proposal from the SEC is the start of a process, not the end of one. Proposed rules typically go through a public comment period, possible revision, and a formal vote before they carry legal force. The direction of travel matters, but nothing is binding today.
There is also a risk layer that any widening of private market access brings with it. Private securities are less liquid than public ones, often lack the disclosure requirements of listed companies, and can be difficult to value or exit. A merit-based gate changes who can buy, not whether the underlying asset is risky. Opening the door to more investors also opens it to more people holding instruments they may struggle to sell. This is analysis, not financial advice, and the SEC's own proposals in this area tend to pair expanded access with investor-protection conditions.
For now, the signal is a regulatory posture: the SEC appears willing to rethink a decades-old wealth test, and one of the industry's loudest voices for clearer rules is treating that as a win. Whether it becomes a real change depends on what the agency writes next and how the comment period plays out.
Overview
The SEC is proposing to grant private market access on merit rather than wealth, and Coinbase CEO Brian Armstrong publicly applauded the move on October 11, 2026. If adopted, it would loosen the accredited-investor wealth test that has long kept most retail investors out of private deals, including many crypto and startup rounds. It remains a proposal, with a comment period and a vote still ahead, and it does not reduce the liquidity and disclosure risks that come with private securities. Watch the SEC's next draft for the actual qualification standard.
