As the crypto companies criticize the United States regulators for cracking down on the crypto industry, they have also outlined chances of relocating their base. In this regard, these companies showed an increasing interest in the United Kingdom hoping they won’t go the same way.
On Monday, a16z, the crypto-focused division of the venture capital giant Andreessen Horowitz, showed interest in the UK. Further, it asked the British Treasury to take a more “nuanced” approach to regulation, adding that “the U.S. approach is not one that the U.K. should consider adopting.”
Brian Quintenz, Head of Policy at a16z took to Twitter to express that the firm “enthusiastically embraces the U.K.’s approach for a ‘proportionate and focused, agile and flexible’ regime.” He added that the investment firm looked forward to continuing work with the Treasury to “establish world-class rules which will protect consumers and allow this innovation to flourish.”
Notably, the a16z’s inclination towards the UK is not the only angle as last month, the firm warned that the U.S. was losing its edge in the digital asset space. However, a16z wasn’t the only company that opined about U.K. regulation on Monday.
Polygon Labs, the group of companies behind the Polygon blockchain network and the 10th largest cryptocurrency MATIC, made suggestions to the Treasury. They said it was “incredibly encouraged” to see the U.K. making steps to regulate the industry. Rebecca Rettig, Polygon Labs Chief Policy Officer tweeted that the U.K. consultation was “excellent.”
Further, she added a suggestion stating that “unbacked crypto assets” i.e. cryptocurrencies that have no specific backing, like Bitcoin, should be “treated differently” from coins and tokens which have a team working behind the technology, or have their value tied to other assets.
It is important to note that the U.K. laid out its first rules to regulate crypto in February. In a consultation paper, the Treasury said it wanted to regulate crypto exchanges like other traditional finance venues.
Reportedly, the crypto companies are pinning their hopes on the UK given the lawmakers’ desire to turn the region into a crypto hub. Lawmakers are speedily progressing towards regulating the industry as the Parliament has been discussing legislation around cryptocurrencies.
Economic Secretary to the UK Treasury, Andrew Griffith, revealed last week that the authorities are planning to impose a regulatory framework on the crypto industry in the next 12 months. In January, he promised the industry to bring forth a timely, sensible, and balanced crypto regulation.
Reportedly, several companies have looked up to the UK as the regulators in the US cracked down on the crypto entities. Following the collapse of crypto exchange FTX in November, the Securities and Exchange Commission has aggressively gone after major crypto brands to urge compliance.
Under the leadership of Gary Gensler, the SEC chief, the regulator has gone after numerous American crypto exchanges like Kraken, Bittrex, and Coinbase for allegedly selling unregistered securities. After receiving a Wells Notice from the SEC, Coinbase boss Brian Armstrong also said they were considering a move to the UK given the U.K. was “moving fast on sensible crypto regulation to both drive economic growth and consumer protection.”
However, the suggestions from the companies make fair sense in the UK as despite their vision for crypto, the regulatory environment was found to be pretty tense in the country. The regulator was found to have a strict approach towards the crypto industry and came under intense scrutiny for mass rejection of licenses to crypto firms.