In the eyes of some American lawmakers and businesses, the U.S. is stifling innovation with its sometimes confusing and often heavy-handed approach to regulating the crypto space.
But Web3 companies are hoping the U.K. won’t go the same way. Today, a16z, the crypto-focused division of VC giant Andreessen Horowitz, asked the U.K. Treasury to take a more “nuanced” approach to regulation, adding that “the U.S. approach is not one that the U.K. should consider adopting.”
The U.K. in February laid out its first rules to regulate crypto. In a consultation paper, the Treasury said it wanted to regulate crypto exchanges like other traditional finance venues.
Head of policy at a16z Brian Quintenz said on Twitter Monday that they “enthusiastically embrace the U.K.’s approach for a ‘proportionate and focused, agile and flexible’ regime.”
He added that the investment firm looked forward to continuing work with the Treasury in order to “establish world class rules which will protect consumers and allow this innovation to flourish.”
1/ @a16zcrypto submitted our response to the UK @HMTreasury “Future Financial Services Regulatory Regime for Cryptoassets” consultation. We enthusiastically embrace the UK’s approach for a “proportionate and focused, agile and flexible,” regime. 🧵. . https://t.co/rT85Xfd8so
— Brian Quintenz (@BrianQuintenz) May 1, 2023
Just last month, a16z warned that the U.S. was losing its edge in the digital asset space. The British government has said it wants the country to become a “global crypto asset technology hub.”
a16z wasn’t the only one who spoke out about U.K. regulation today. Polygon Labs also responded by saying it was “incredibly encouraged” to see the U.K. making steps to regulate the industry. Polygon Labs Chief Policy Officer Rebecca Rettig added on Twitter that the U.K. consultation was “excellent.”
Polygon Labs, the group of companies behind the Polygon blockchain network and 10th largest cryptocurrency MATIC, made suggestions to the Treasury.
In particular, it suggested that “unbacked cryptoassets”—cryptocurrencies which have no specific backing, like Bitcoin—should be “treated differently” from coins and tokens which have a team working behind the tech, or have their value tied to other assets.
Coinbase boss Brian Armstrong also last month said that the U.K. was “moving fast on sensible crypto regulation to both drive economic growth and consumer protection.” America’s biggest crypto exchange has said it is actively looking to rapidly expand overseas.
Following the collapse of mega exchange FTX in November, the American regulators—particularly the Securities and Exchange Commission—have aggressively gone after major crypto brands to urge compliance.
Under SEC Chairman Gary Gensler, the SEC has gone after American crypto exchanges Kraken, Bittrex, and Coinbase for allegedly selling unregistered securities.
But not everyone is happy with the crackdown: Republican politicians especially think regulators are forcing tech offshore. If that’s the case, the U.K. appears poised to welcome in any crypto companies that may become displaced.
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