Tyler Winklevoss called the debate “a must-see” and highlights “how terrible the Biden-Harris Administration has been for the cryptocurrency industry.”
Andreessen Horowitz (a16z) founders Ben Horowitz and Marc Andreessen recently discussed the various challenges the cryptocurrency industry has faced under the current administration, during which they also endorsed former President Donald Trump.
The founders were openly critical of the Biden-Harris Administration's handling of the cryptocurrency industry, highlighting a number of regulatory challenges that they believe are stifling innovation and growth in the sector.
During the podcast conversation, Horowitz and Andreessen detailed their frustrations with the Securities and Exchange Commission (SEC). They noted that the regulator has not provided clear guidance on which cryptocurrencies are considered securities and which are commodities.
Gemini founder Tyler Winklevoss said in a social media post on July 24 that the discussion is “a must” and highlights “how terrible the Biden-Harris administration has been for the crypto industry.”
Regulatory ambiguity
This regulatory ambiguity has led to the SEC filing lawsuits against more than 30 cryptocurrency companies included in a16z’s portfolio. Andreessen commented that such aggressive enforcement is unprecedented, as neither he nor Horowitz had encountered a single Wells notice in their 30-plus year careers prior to this administration.
SEC legal actions, even when unsuccessful, pose significant challenges for cryptocurrency startups. Horowitz noted that while the SEC often loses these cases, the financial and operational pressure startups endure to fend off the government’s vast resources is overwhelming. He described these victories as “Pyrrhic,” suggesting that the cost of legal battles is detrimental to the industry’s sustainability.
The debate also centered on the Federal Deposit Insurance Corporation (FDIC), which has reportedly made it nearly impossible for cryptocurrency companies to obtain banking services. Horowitz and Andreessen compared this to “Operation Chokepoint 2.0,” comparing it to previous efforts that targeted legal cannabis companies, effectively forcing them to operate without access to traditional banking systems.
Another major point of contention is President Biden’s veto of a bipartisan repeal of Staff Accounting Bulletin (SAB) 121. This SEC rule complicates banks’ ability to hold cryptocurrencies on behalf of their clients, making them liable for any decline in the value of the digital assets they manage.
Andreessen criticized this regulation for being deliberately harmful to the cryptocurrency industry and designed to prevent banks from interacting with digital assets.
Not willing to commit
The co-founders said their efforts to reach out to the administration have been met with resistance. They revealed that President Biden, SEC Chairman Gary Gensler, and Sen. Elizabeth Warren have all refused to meet with them to discuss their concerns.
This lack of engagement marks a stark contrast with previous administrations, where Andreessen had successfully collaborated with leaders like Bill Clinton and Al Gore during the early days of the commercial Internet.
In contrast, former President Donald Trump has shown a willingness to collaborate with crypto sector leaders and has taken a supportive stance towards the industry. His platform includes ambitious goals to build a strong economy, promote innovation, and lead the world in emerging industries, with a particular emphasis on cryptocurrencies.
Trump has publicly stated that he opposes the creation of a central bank digital currency (CBDC) and that he will defend the right to mine bitcoins. He has also defended the right of Americans to hold their digital assets and conduct transactions without government oversight.
The former president also criticized Biden and Gensler for their handling of the industry and pledged to change the government's approach if elected.