Investment Firms a16z and Polygon Labs Praise U.K.’s Crypto Regulation
Two major investment firms, a16z and Polygon Labs, have praised the U.K.’s approach to crypto regulation, in stark contrast to the attitudes of U.S. policymakers. Some American lawmakers and businesses have criticized the U.S. for stifling innovation with its heavy-handed and confusing approach to regulating the crypto space. However, Web3 companies hope that the U.K. will take a more “nuanced” approach to regulation, with a16z’s crypto-focused division urging the U.K. Treasury to consider its approach, as the U.S. approach is not recommended for adoption.
The U.K. has already introduced its first rules to regulate crypto, with the Treasury seeking to regulate crypto exchanges as it would other traditional finance venues. Brian Quintenz, Head of Policy at a16z, said on Twitter that they “enthusiastically embrace the U.K.’s approach for a ‘proportionate and focused, agile and flexible’ regime,” adding that the investment firm looked forward to continuing its work with the Treasury to “establish world-class rules which will protect consumers and allow this innovation to flourish.”
Furthermore, Polygon Labs expressed its encouragement towards the U.K.’s steps to regulate the industry, with its Chief Policy Officer Rebecca Rettig calling the U.K. consultation “excellent” on Twitter. The group of companies behind the Polygon blockchain network and the 10th largest cryptocurrency, MATIC, suggested to the Treasury that “unbacked cryptoassets” 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 CEO Brian Armstrong also praised the U.K.’s “sensible crypto regulation to both drive economic growth and consumer protection” and revealed that his company was actively looking to expand overseas. In contrast, American regulators, particularly the Securities and Exchange Commission (SEC), have aggressively gone after major crypto brands for compliance, following the collapse of the mega exchange FTX in November.
Under SEC Chairman Gary Gensler, the SEC has gone after American crypto exchanges Kraken, Bittrex, and Coinbase for allegedly selling unregistered securities. However, not everyone is happy with the crackdown, with Republican politicians, in particular, believing that regulators are forcing tech offshore. Should this be the case, the U.K. appears to be poised to welcome in any crypto companies that may become displaced.
The U.K. has received praise from a16z, Polygon Labs, and Coinbase for its approach to regulating crypto, in contrast to the U.S.’s heavy-handed approach. The U.K. government seeks to regulate crypto exchanges like traditional finance venues, with a focus on proportionate, agile, and flexible regulation that protects consumers and allows innovation to flourish. As such, the U.K. hopes to become a global crypto asset technology hub and welcomes any displaced crypto companies from other countries.