The founders of Andreessen Horowitz (a16z), Ben Horowitz and Marc Andreessen, recently expressed their concerns about the regulatory challenges that the crypto industry is facing under the Biden-Harris Administration. They openly criticized the administration’s handling of the industry, pointing out a series of regulatory hurdles that they believe are hindering innovation and growth in the sector.
Horowitz and Andreessen highlighted their frustrations with the Securities and Exchange Commission (SEC), noting the lack of clear guidance on which cryptocurrencies are considered securities and which are commodities. This regulatory ambiguity has led to the SEC filing lawsuits against more than 30 crypto companies within the a16z portfolio. The aggressive enforcement actions by the SEC, according to Andreessen, are unprecedented and have put significant strain on crypto startups.
The discussion also touched on the Federal Deposit Insurance Corporation (FDIC), which has made it difficult for crypto companies to secure banking services. Horowitz and Andreessen compared this to “Operation Chokepoint 2.0,” drawing parallels to previous efforts that targeted legal cannabis companies. This lack of access to traditional banking systems poses a significant challenge for the industry’s growth and development.
President Biden’s veto of a bipartisan repeal of Staff Accounting Bulletin (SAB) 121 was another point of contention. This SEC rule complicates banks’ ability to hold crypto on behalf of their customers, making them liable for any decrease in the value of the digital assets they manage. Andreessen criticized this regulation as intentionally harmful to the crypto industry, aiming to discourage banks from engaging with digital assets.
Horowitz and Andreessen revealed that their efforts to engage with the Biden administration have been met with resistance. President Biden, SEC Chair Gary Gensler, and Senator Elizabeth Warren have all declined to meet with them to discuss their concerns. This lack of engagement is in stark contrast to previous administrations, where Andreessen had successfully collaborated with leaders such as Bill Clinton and Al Gore during the early days of the commercial internet.
In contrast, former President Donald Trump has shown a different approach towards the industry. Trump has expressed willingness to engage with crypto leaders and has voiced support for the industry. He has criticized Biden and Gensler for their handling of the industry and has pledged to change the government’s approach if re-elected. Trump’s platform includes supporting the right to mine Bitcoin, opposing the creation of a central bank digital currency (CBDC), and advocating for Americans’ rights to self-custody digital assets without government oversight.
The crypto industry is facing significant regulatory challenges under the Biden-Harris Administration, with founders like Horowitz and Andreessen openly criticizing the administration’s approach. The lack of clear guidance, aggressive enforcement actions, and resistance to engagement with industry leaders have created obstacles for innovation and growth in the sector. The contrast between the current administration and previous ones, particularly in terms of engagement and support for the industry, highlights the need for constructive dialogue and collaboration to address these challenges effectively.
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