Are you talking about accredited investors? In the US, the only criteria to be an accredited investor, more or less, is having a net worth of over a million or an income over 200k. The above looks a bit more like a European definition, though even there it's optimistic, and in practice "has lots of money" is good enough for accredited investor status in the EU as well.

To be clear, most of the investors weren't VCs and things; they were, largely, individual rich idiots (or their family offices, at their direction). Theranos had trouble with real VCs, who wanted inconvenient things like audited accounts.

The rules protecting accredited investors are indeed laxer than those protecting normal people, but it is _still not legal to defraud them_.

Crypto does seem to have carved out a "most laws don't apply to us" niche, and particularly in the US this seems like it'll get worse before it gets better. That hardly excuses Holmes, though.