As the cryptocurrency industry continues to make gains in the wake of the re-election of former President Donald Trump on Tuesday, notable VC firm a16z crypto has a message for crypto founders: When it comes to regulations, you can finally relax.
"The good news is that there is now a pathway for constructive engagement with regulatory agencies and legislation that can bring regulatory clarity," a16z tells crypto founders in a new post. " You should now all feel empowered to explore all of the groundbreaking products and services that blockchains enable, including tokens."
The post, written by a16z crypto's heads of policy and regulatory alongside its general counsel, sets out an optimistic expectation for laxer regulation and governance of the crypto sector under the incoming administration, though it says that the "vast majority" of speculation on the specifics of such a regime are just "noise" at this point.
The post specifically calls out token issuance as one activity founders can have more confidence in. "For many of you who have delayed using tokens to distribute control of your project and build community due to fears of regulatory overreach, you should now have greater confidence in your project’s use of tokens as a legitimate and lawful tool," the post states.
The authors, Miles Jennings, Brian Quintenz, and Michele Korver, also gestured towards a16z's plans for next year. "Next year, we’ll advocate for clear regulatory frameworks that foster and bolster innovation and decentralization...We’ll also soon release new guidance on the use of the Decentralized Unincorporated Nonprofit Association (DUNA) for projects looking to make the U.S. home, insulate tokenholders from liability, manage tax and compliance needs, and enable greater economic activity," the authors wrote, referencing Wyoming's unique law regarding DAOs.
While the post is optimistic, the authors note that some behaviors may still run afoul of regulators. "While we’ll likely have greater flexibility to experiment, we can’t forget that the fundamental regulatory principles applicable to blockchain systems remain unchanged," the authors wrote, advising founders to "continue to focus on removing centralized aspects or dependencies on trust within your projects, as these are the areas that continue to attract regulatory scrutiny."
"We’re optimistic that with clearer rules, it will make it easier to identify and shut down bad actors and allow well-meaning projects to take off," Jennings said in a post on X.
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