a16z Crypto has responded positively to the UK Treasury’s Future Financial Services Regulatory Regime for Cryptoassets consultation.
The global VC issued a 27-page letter which broadly applauded the UK’s plan to work closely with industry to formulate a “proportionate and focused, agile and flexible” regime.
Head of policy Brian Quintenz, former commissioner at the Commodity Futures Trading Commission in the US, tweeted that the UK’s suggested approach “looks to ensure similar regulatory outcomes for crypto and doesn’t assume that superficially related activities automatically create the same legacy financial risks and require the exact same regulatory rules”.
Praising the Treasury’s view that ‘risk taking is a desirable part of the cycle of innovation and we wish to manage, not stifle, this’, he wrote: “Our consultation response agrees with the need to regulate centralised service providers, where legacy risks, such as conflicts of interest, asymmetric information, and acceptance of or custody over customer funds, are present.
“Web3’s founders, developers, and builders are taking note and are eager for such a regime.”
He also spoke of the “importance of recognizing how decentralised systems, such as blockchain protocols or smart contract protocols, are different than centralised issuers of crypto products”, adding: “Rules which allow for protocols to achieve decentralisation through free token distributions or for conducting network-securing activity will appeal to developers who embrace the benefits of decentralised systems.
“Ultimately, it will be those systems that will allow individuals to truly own the value of their network contributions.”
He concluded: “Enacting a well-tailored regulatory framework that embraces and encourages decentralisation will all but ensure the realisation of the UK becoming the Web3 centre.”