Crypto Firms Beg UK Regulators Not To Follow US

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In the eyes of some US lawmakers and businesses, the US is stifling innovation with its sometimes confusing and often heavy-handed approach to regulating the crypto space.

But Web3 companies hope the UK doesn’t follow suit. Today a16z, the crypto division of venture capital giant Andreessen Horowitz, called on the UK Treasury to take a more nuanced approach to regulation, adding that the US approach is not the one the UK should consider adopting.

The UK introduced its first rules to regulate crypto in February. In a consultation paper, the Treasury said it wants to regulate crypto exchanges like other traditional funding venues.

The head of policy at a16z, Brian Quintenz, said on Twitter on Monday that they were enthusiastically adopting the UK’s approach for a proportionate and targeted, nimble and flexible regime.

He added that the investment firm looks forward to continuing its work with the Treasury to establish world-class rules that will protect consumers and allow this innovation to thrive.

1/ @a16zcrypto submitted our response to the UK @HMTreasury consultation “Future Financial Services Regulatory Regime for Cryptoassets”. We enthusiastically embrace the UK’s approach for a “proportionate and targeted, nimble and flexible” scheme. . . https://t.co/rT85Xfd8so

Brian Quintenz (@BrianQuintenz) May 1, 2023

Last month, a16z warned that the United States was losing its edge in the digital asset space. The UK government has said it wants the country to become a global hub for crypto asset technology.

a16z wasn’t the only one talking about UK regulations today. Polygon Labs also responded, saying it was incredibly encouraged to see the UK taking steps to regulate the industry. Rebecca Rettig, policy director at Polygon Labs, added on Twitter that the UK consultation was excellent.

Polygon Labs, the group of companies behind the Polygon blockchain network and the 10th largest cryptocurrency MATIC, made some suggestions to the Treasury.

In particular, he suggested that unbacked crypto-assets, cryptocurrencies that don’t have a specific backing, like Bitcoin, should be treated differently from coins and tokens that have a team working behind the technology, or whose value is tied to other assets.

Coinbase boss Brian Armstrong also said last month that the UK was moving quickly on sensible crypto regulation to boost both economic growth and consumer protection. The Americas’ largest crypto exchange said it is actively looking to expand overseas quickly.

Following the collapse of mega-exchange FTX in November, US regulators, particularly the Securities and Exchange Commission, aggressively attacked major crypto brands to pressure them into compliance.

Led by SEC Chairman Gary Gensler, the SEC has gone after US crypto exchanges Kraken, Bittrex, and Coinbase for allegedly selling unregistered securities.

But not everyone is happy with the crackdown: Republican politicians in particular believe regulators are forcing technology overseas. If so, the UK seems ready to welcome any crypto companies that might be moved.

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