Venture capital firm Andreessen Horowitz, known as a16z, has sent an open letter to the Senate Banking Committee urging a reconsideration of a bill concerning cryptocurrency market regulations.
Appeal to the Senate
In the letter, a16z expressed concerns regarding the proposed bill, introduced in late July, which builds on the 21st Century Financial Innovation and Technology Act, also known as the CLARITY Act. The firm called for major revisions to the draft, stating that the current proposal could weaken investor protections and leave room for regulatory arbitrage.
Main Concerns of a16z
A central issue raised by a16z relates to the concept of 'ancillary assets,' which covers tokens sold with investment contracts but lacking equity, dividends, or governance rights. In its letter, the firm stated that if this definition remains unchanged, it could open the door to insider sales evading securities laws. 'The ancillary asset construct should not serve as the foundation for legislation without significant modifications,' the letter stated.
Suggestions for Bill Improvement
Instead, a16z is advocating for a narrower 'digital commodity' model rooted in the existing CLARITY framework. The firm also supported the long-standing Howey test, emphasizing that attempts to rewrite it would be risky and unnecessary. A16z warned that the current structure of the bill could allow issuers to distribute tokens to insiders under exemptions, then sell them to the public without full regulatory oversight.
Thus, Andreessen Horowitz is strongly urging lawmakers to rethink the draft bill to prevent potential negative consequences for the crypto industry and protect investor interests.
