- The fund asks the regulator to “not repeat the mistakes” of the United States
- In particular, a16z considers a unified approach to regulating different classes of crypto assets ineffective.
In early February of this year, the UK Treasury published consultation document about the future regulatory framework in the field of cryptocurrencies. The regulator called on the parties to share their views on what the rules should be.
Yesterday, May 1, the head of the regulatory department of the a16z venture capital fund, Brian Quintenz, published the organization’s official response. In it, the counterparty calls on the Treasury to act “more subtly” and not repeat the mistakes of the overseas “neighbor”.
“We applaud Andrew Griffith (Treasury Secretary of Economic Affairs) for his efforts and understanding that crypto asset markets continue to evolve at a tremendous pace. This brings both new opportunities and risks, perhaps previously unknown,” declares Quintens.
Free distribution of tokens
According to the representative of a16z, the regulator should understand that decentralized protocols are not the same as centralized issuers of crypto products. And it is impossible to identify them in the normative field.
According to Quintenz, the community will warmly approve of the rules that allow projects to develop through the distribution of tokens. At the same time, the new rules should not apply to the technology itself, but to specific projects and enterprises.
“The DeFi sector can produce unique risks that the current regulatory framework does not cover. For this reason, individual rules seem optimal to us. Service providers and contractors can comply with them, protocols can not, – says Quintens.
Do not repeat the mistakes of the USA
This is how an a16z representative commented on the current situation in the States:
“This is not the approach that the UK should take. We believe that here the regulator can really use a decentralized regulatory framework that promotes the widespread adoption of crypto assets and the development of Web3, but will also be aimed at protecting consumer rights.”
Note that not only a16z responded to the Treasury’s call. Polygon Labs, AFME and DPF also took part in the collection of opinions.
In general, the parties favorably received the “proportional” regulation approach (high risk = tight rules and vice versa). But at the same time, the department is asked to clarify how this will work in practice.
The parties also noted that before the introduction of the regulatory framework, a thorough analysis should be carried out to determine whether the project structure directly reduces its potential risks.
We previously reported that the UK may change its approach to taxing staking and crypto lending. More details at the link.