After the heavy hand approach towards crypto companies by the United States, the companies situated in the United Kingdom pleaded with regulators to not follow the approach adopted by the US. Few Web3 companies view the policy of the United States are very suffocating and unclear in regulating crypto. They called this approach “heavy-handed’.
Today, the a16z company of Venture Capital giant Andreessen Horowitz, requested Her Majesty’s Treasury to follow a more lenient and calculative approach towards Web3. Additionally, he asked HM Treasury to refrain from following what the United States currently relied upon. The intention behind the statement was to keep crypto companies in the United Kingdom and not let them migrate like companies are doing in the US.
In February 2023, the United Kingdom Treasury proposed new rules consultation paper intended to place more responsibility on crypto entities. It also suggested that they need to authorize and disclose documents. Also, the regulation will be based on the existing Financial Services and Markets Act 2000 which governs traditional trading venues.
Simply, the regulators based in the United Kingdom would first need to authorize themselves before they can trade in Great Britain. Kraken’s UK managing director Blair Halliday also commented that the government’s priority should be to underline why crypto assets entities should be inside the perimeter. Additionally, he said, “Right now, there is little preventing firms based outside the perimeter from providing products and services to the UK market, exposing UK customers and institutions to additional risk.”
Recently, a report released by a16z said that the United States is losing its grip on the digital asset business hub because of the strict and unclear approach of regulatory bodies. It suggested that the United States had nearly 40% of crypto developers in 2018, that ratio has continuously fallen over the last few years. In 2022, it came down to 30% according to a report. Polygon blockchain network, the 10th largest largest cryptocurrency MATIC provided some suggestions to the Treasury. Also, a report suggested that cryptocurrencies like Bitcoin (BTC) which don’t have any backing should be treated differently.