- Fund asks the regulator “not to repeat the mistakes” of the U.S.
- In particular, a16z believes a unified approach to regulating different classes of cryptoassets is ineffective
In early February this year, the UK Treasury published a consultation paper on the future regulatory framework for cryptocurrencies.
The regulator urged parties to share their views on what the rules should be.
Yesterday, May 1, Brian Quintens, head of regulatory affairs at a16z Venture Fund, released the organization’s official response.
In it, the counterpart calls on Treasury to act “more subtly” and not repeat the mistakes of its overseas “neighbor.”
“We applaud Andrew Griffith (Treasury Secretary for Economic Affairs) for his efforts and understanding that crypto-asset markets continue to evolve at an enormous rate.
This brings both new opportunities and risks, perhaps previously unknown,” Quintens states.
Free token distribution
According to a16z representative, the regulator must understand that decentralized protocols are not the same as centralized cryptocurrency issuers.
And you can’t identify them in a regulatory environment.
In Quintenz’s opinion, the community would fervently approve of rules that allow projects to grow through token distribution.
However, the new rules should apply not to the technology itself, but to specific projects and businesses.
“The DeFi sector can produce unique risks that the existing regulatory framework does not cover.
For this reason, individual rules seem optimal to us. Service providers and contractors can abide by them, protocols can’t,” says Quintens.
Don’t repeat the mistakes of the United States
This is how a16z representative commented on the current situation in the States:
“This is not the approach Britain should be following. We believe that here the regulator can really use a decentralized regulatory framework that promotes widespread adoption of crypto-assets and Web3 development, but will also be aimed at protecting consumer rights.”
We note that the Treasury’s call was answered not only by a16z. Polygon Labs, AFME, and DPF also participated in the gathering of views.
In general, parties were favorably disposed to the “proportional” regulatory approach (high risk = strict rules and vice versa). But the agency is being asked to clarify how this will work in practice.
The parties also noted that a thorough analysis should be conducted before implementing the regulatory framework to see if the direct structure of the project reduces its potential risks.
We previously reported that the UK may change its approach to taxing steaming and cryptocurrency lending. Read more at the link.