Miles Jennings, Head of Policy and General Counsel for a16z crypto, recently articulated a clear stance on cryptocurrency regulation, asserting that the industry's success hinges on legal frameworks recognizing the inherent facts of the technology rather than seeking special regulatory loopholes. In a recent social media post, Jennings emphasized the need for legislation to reconcile existing laws with the unique characteristics of digital assets, which often mitigate risks traditionally addressed by financial regulations.
Jennings, a prominent voice from the influential venture capital firm Andreessen Horowitz's crypto arm, highlighted specific distinctions crucial for effective regulation. He stated, "Developers aren’t money transmitters—they don’t control user funds," and similarly, "DeFi protocols aren’t intermediaries—they don’t custody assets or effects trades." He further clarified that "Network tokens aren’t securities—no one controls their value, supply, or functionality," underscoring the decentralized nature of many crypto components.
This perspective aligns with ongoing efforts in Washington D.C. to establish a comprehensive regulatory framework for digital assets. Recent legislative developments, such as the passage of the GENIUS Act for stablecoins and the CLARITY Act in the House of Representatives, indicate a growing push for clear rules. These bills aim to define jurisdictional boundaries, particularly between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), a debate central to the classification of various digital assets.
Jennings argued that proper legal recognition "does not require special exemptions, but it does require legislation to reconcile outdated legal frameworks with a technology that removes the very risks those laws were meant to mitigate—custodial risk, discretionary control, and information asymmetry." He warned against advocating for "special treatment where it is not warranted," particularly for entities that do control funds or effect transactions, cautioning that such approaches could "invite the scams, frauds, and blowups that could be its undoing."
As Head of Policy, Jennings plays a key role in shaping a16z crypto's engagement with policymakers, advocating for regulations that foster innovation while addressing legitimate concerns. His firm has consistently supported clear, thoughtful regulation that focuses on businesses rather than the underlying protocols. Ultimately, Jennings concluded, "Crypto wins by being better, not by negating rules that still matter," advocating for a regulatory environment that allows legitimate innovation to flourish through inherent technological advantages and responsible practices.