a16z criticizes U.S. CLARITY Act-based regulatory draft… "Ancillary asset provision raises loophole concerns"
Summary
- a16z urged a complete review, stating that the 'ancillary asset' provision in the United States Senate Committee on Banking, Housing, and Urban Affairs' cryptocurrency regulatory bill draft could result in serious loopholes.
- a16z asserted that the draft undermines investor protection and conflicts with the principles of existing securities laws.
- a16z also noted that blockchain technology operations themselves should be clearly specified as not subject to regulation.
U.S. venture capital firm a16z has urged a complete review, warning that the 'ancillary asset' concept in the cryptocurrency regulatory bill draft released by the United States Senate Committee on Banking, Housing, and Urban Affairs could create serious loopholes.
According to Cointelegraph, a digital asset-focused media outlet, a16z stated in a letter to the Senate Banking Committee on the 1st (local time), "This draft undermines investor protection and conflicts with the core principles of existing securities laws." The draft is based on the CLARITY Act and has been made public by the Senate Banking Committee to gather feedback from market participants.
a16z explained, "The ancillary asset concept refers to tokens issued based on investment contracts but without including equity, dividends, or governance rights," adding, "Excluding such assets from securities law could become a loophole for insider advantages or regulatory evasion."
The firm further argued, "The act of technological operation itself should not be considered a financial activity under securities law," and emphasized, "Core blockchain technologies such as mining, staking, and smart contract execution should be clearly specified as not subject to regulation."
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
