# Accreditation

Learn how issuers verify and attest to investor accreditation on CapSign.

## What is Accreditation?

**Accredited investors** meet SEC income or net worth thresholds and can invest in certain private offerings.

## Why It Matters

**Reg D 506(c) offerings** require ALL investors be accredited and verified.

## Issuer-Issued Attestations

On CapSign, **issuers verify accreditation** and issue attestations through the UI.

### Why Issuers Issue?

* **Issuer responsibility** - Issuers must verify investor qualifications
* **Privacy** - Investors don't share financial details with CapSign
* **Flexibility** - Issuers use their verification process
* **Compliance** - Meet SEC reasonable steps requirement

## For Investors

### Getting Accreditation Attestation

1. **Contact issuer** with documentation:
   * Income verification (last 2 years tax returns, W-2s)
   * Net worth statement (assets and liabilities)
   * Professional credentials (Series 7, 65, 82 licenses)
2. **Issuer reviews** documentation
3. **Issuer issues attestation** via CapSign UI
4. **Attestation available** immediately for use

### What Qualifies

**Income test:**

* $200k+ individual income (last 2 years)
* $300k+ joint income (last 2 years)
* Expectation of same this year

**Net worth test:**

* $1M+ net worth (excluding primary residence)

**Professional:**

* Series 7, 65, or 82 license holder
* Knowledgeable employee of private fund

**Entity:**

* Entity with $5M+ in assets
* Entity owned entirely by accredited investors

## For Issuers

### Reviewing Investor Documentation

When investor submits documentation:

1. **Request documents:**
   * Tax returns (last 2 years)
   * W-2s or 1099s
   * Bank/brokerage statements
   * CPA letter
   * Or professional licenses
2. **Verify authenticity:**
   * Check documents are complete
   * Verify calculations
   * Confirm expectation for current year
3. **Document review:**
   * Keep records of review
   * Note verification method
   * Save documentation

### Issuing Attestation via UI

1. Navigate to **Admin** → **Investors**
2. Select investor
3. Click **Issue Attestation**
4. Choose type:
   * Accredited Investor (income)
   * Accredited Investor (net worth)
   * Accredited Investor (professional)
   * Qualified Purchaser
5. Set expiration (typically 90 days)
6. Sign with wallet
7. Attestation issued on-chain

### Managing Attestations

* **View all issued attestations**
* **Check expiration dates**
* **Revoke if needed** (e.g., if investor circumstances change)
* **Renew** before expiration

## Attestation Details

### What's Included

* Wallet address
* Qualification type
* Issue date
* Expiration date
* Issuer address
* Supporting documentation hash (optional)

### What's NOT Included

* Investor name
* Income amounts
* Net worth details
* Tax returns
* Financial statements

**Privacy-preserving - only proof of qualification on-chain.**

## Verification Process

### Reasonable Steps

SEC requires issuers take "reasonable steps" to verify:

**Acceptable methods:**

* Review tax returns and W-2s
* Review financial statements
* CPA letter
* Broker-dealer verification
* Professional credentials

**Not acceptable:**

* Self-certification alone
* Unverified questionnaires

### Documentation

Keep records of:

* Verification method used
* Documents reviewed
* Date of verification
* Person who verified
* Basis for determination

## Expiration and Renewal

### Why Expirations?

* Circumstances change
* Regulatory requirement for periodic re-verification
* Best practice (typically 90 days for offerings)

### Renewal Process

1. Investor submits updated documentation
2. Issuer reviews
3. Issues new attestation
4. Old attestation expires or is revoked

## Use Cases

### Scenario 1: New Investor

Investor wants to invest in 506(c) offering:

1. Investor contacts issuer
2. Provides last 2 years tax returns
3. Issuer verifies $250k income each year
4. Issues "Accredited Investor (income)" attestation
5. Investor can now invest

### Scenario 2: Professional

Licensed professional:

1. Provides Series 7 license verification
2. Issuer confirms active license
3. Issues "Accredited Investor (professional)" attestation
4. Can invest without financial disclosure

### Scenario 3: Entity

Investment entity:

1. Provides entity financial statements
2. Shows $5M+ in assets
3. Issuer verifies
4. Issues "Accredited Entity" attestation

## Best Practices

### For Issuers

* **Thorough review** - Don't rush verification
* **Document everything** - Keep detailed records
* **Set reasonable expirations** - 90 days typical
* **Consistent process** - Verify all investors same way
* **Consult counsel** - If unsure about qualification

### For Investors

* **Provide complete docs** - Don't leave anything out
* **Use recent documents** - Within last 90 days
* **Be honest** - Misrepresentation has legal consequences
* **Keep private** - Only share with trusted issuers

## Legal Considerations

### Issuer Liability

Issuers are responsible for:

* Verifying investor qualifications
* Taking reasonable steps
* Maintaining records
* Compliance with securities laws

### Investor Liability

False representation of accreditation status:

* Securities law violation
* Potential civil/criminal penalties
* Investment may be rescinded

**Always be truthful.**

## FAQs

**Q: Can I use one attestation for multiple offerings?** A: Yes! Attestations are portable across CapSign offerings.

**Q: What if issuer won't verify me?** A: Invest in 506(b) offerings (up to 35 non-accredited allowed) or Reg A+.

**Q: Can I self-attest?** A: Not for 506(c). Issuer must verify.

**Q: How long does verification take?** A: Depends on issuer. Typically 1-3 days.

**Q: What if my attestation expires?** A: Renew before investing again.

## See Also

* [Persona Verification](/capsign/identity/persona-verification.md)
* [Attestations](/capsign/identity/attestations.md)
* [SEC Accredited Investor Definition](https://www.investor.gov/introduction-investing/investing-basics/glossary/accredited-investor)


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