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Crypto companies in the United States are warning against heavy-handed regulation, hoping that the United Kingdom takes a different approach. Web3 firms, including a16z, Coinbase, and Polygon, are urging the U.K. Treasury to adopt a "nuanced" approach to crypto regulation that protects consumers while allowing innovation to flourish.
In February, the U.K. laid out its first rules to regulate crypto, stating that it wanted to regulate crypto exchanges like other traditional finance venues. A16z's Head of Policy, Brian Quintenz, has praised the Treasury's approach as "proportionate and focused, agile, and flexible," adding that the investment firm looks forward to continuing to work with the Treasury to establish world-class rules.
Polygon Labs' Chief Policy Officer, Rebecca Rettig, praised the U.K.'s consultation as "excellent" and suggested that "unbacked cryptoassets" should be treated differently from coins and tokens that have a team working behind the tech or have their value tied to other assets.
Coinbase CEO Brian Armstrong has expressed support for the U.K.'s sensible crypto regulation to drive economic growth and consumer protection. However, the U.S. Securities and Exchange Commission (SEC) has aggressively pursued major crypto brands for compliance, including Kraken, Bittrex, and Coinbase, for allegedly selling unregistered securities.
Some American lawmakers and businesses believe that the U.S. approach is stifling innovation, and they fear that regulators are forcing tech offshore. If this is the case, the U.K. appears poised to welcome any crypto companies that may become displaced.
The UK's approach to regulating the crypto industry has received praise from Web3 companies, hoping that the country will adopt a more "nuanced" approach compared to the heavy-handed and confusing regulatory framework in the US. American regulators, particularly the Securities and Exchange Commission (SEC), have aggressively gone after major crypto brands to urge compliance. The UK's efforts to establish a crypto asset technology hub could benefit from this situation as it becomes a more attractive destination for crypto companies.
