Venture Capital firm Andsen Horovitz (A16Z) is calling US MPs to amend a drasto regulation bill, warning that the proposed Framework may open and weaken investors.
In an open letter on Thursday, the US Senate Banning Committee should stop the drawbacks in the Draft Crypto Act. The letter is a response to the discussion draft issued in late July.
Discussion in questions is formed on the 21st century Financial Innovation and Technology Act (Classes Act) and looks for industry input on Oning Crypto regulation. The A16Z indicates the definition of auxiliary assets, referring to the tokens sold with an investment contract that gives buyers no equity, dividend or governance rates.
“Formation of auxiliary assets should not be served as the foundation of the law without significant amendments,” it is written in the letter.
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A16Z pushes for “Digital Commodity” model
The A16Z stated that the current approach fails to resolve the main issues facing crypto markets and although will be inconsistent with testing, prolonged punchmarks to define securities.
The investment firm said the approach “Crypto will not solve the challenges faced by market participants.” Instead, the firm recommends adopting the clarity act of narrow “digital commodity” Framework, which remains the wold, which provides great during simplicity.
A16Z also claimed that “Hovi test is an important component of the American securities law” and should be the current form. Its dull solution is “to codes a modern application friendly to auxiliary assets.”
It has described the proposed changes of how “unnecessary – and dangerous – as described as it wants to turn a way that departs from systematic law and investor reduces safety”:
“These changes are not just prediction – they are perpetable with a broad architecture of the American Securities Act.”
Insider’s sales should be limited
A16Z also stated that the implementation of primary transaction for secondary transactions and securities law for commodity rules creates a loopol, allowing issuers to sell supporters under experts, then re -selling in public market without falling under the rules of securities.
As a solution, the investment firm spent requires provisions to obtain decentralization by eliminating matches of control. The letter states that “implementing transfer sanctions through methods can close the flaws, which will arise otherwise. ,
Raw for A16Z, it will also prevent internal formula enrichment at the end of public investors and will ensure that the differences between primary and secondary markets remain meaningful:
“Once the control is abandoned and the project is decentralized, these restrictions should fall, because the assets of the asset are now similar to an object.”
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A control-based decentralization framewew
The firm suggests that regulators should adopt a control-based decentralization Framework, which is “proprietary method of evaluating the risk profile of the encyclopedia asset.”
The letter suggests that the approach “should be focused on the fact that the party retains the unilateral authority – Bipian, Economic, or Government – on the blockchain system.” This, Casabal for the Investment Firm, should be considered when applied when howy test is applied:
“Hovi should not be released.
Protect the plumber, not pipe
A16Z further states that the Securities and Exchange Commission uses (SEC (SEC)
It clashes that it leads to low transparency, highlighting users to unknown risks and innovations of stalls. The letter also suggests that the involvement with technology based on crypto should not cause violation of securities.
“The legislation should be clarified that the core technology work required for the operation of the decentralized blockchain system – such as unanimous algorithms, mining, stucking and executing smart contractions. No, and in the subject, form regulated financial activity under American securities or goods,” said the firm said.
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