Early November, Colin McCune I participated Andreessen Horowitz Krypto was the Republican Deputy Chief of Staff on the House Financial Services Committee and former executive of Patrick McHenry (Rn.C.).
Simply put, he launched a new role during a tumultuous time. November 2nd, CoinDesk It was published Alameda Research’s balance sheet includes FTX and Sam Bankman-Fried as well as years of lobbying From the crypto industry.
Although it was not in a16z direct exposure For FTX, the company is not affected by Crypto Winter.As luck Learn more in our recent article reportMarch a16z purchased We have a major stake in Yuga Labs, the creators of the Bored Ape NFT. Since then, the entire NFT market has shrunk by 97% of his. In addition, the Securities and Exchange Commission Research Consider whether Yuga Labs offers unregistered securities; Regulatory uncertainty Swirling around the cipher.
And according to wall street journalthe a16z crypto fund is lost 40% of the value in the first half of the year.
As the crypto industry finds a foothold in the post-FTX world, a16z has invested in McCune and Brian Quintensa former member of the Commodity Futures Trading Commission.
luck At the end of what has been a chaotic week for Sam Bankman-Fried’s, I spoke with McCune on Friday. arrest congressional hearings Senate When McCune’s former employerthe House Financial Services Committee, led a bipartisan debate possible cryptography.
This interview has been edited for length and clarity.
We had two very different hearings in the House and Senate this week. what’s your point?
First and foremost FTX status It’s obviously a bad situation. It’s clear that the industry has to regain trust here. But I think it’s important to remember.This is what we’ve actually heard from both sides of the aisle and from both hearings, and this is not unique to crypto. What you saw in the House hearings, especially [FTX CEO] John Ray as a witness was much the same.
Collectively, what I’ve heard from Democrats and Republicans is that the United States needs clear regulation. It gives more precise direction.
There are members who are pretty sure and determined about this. But also members who have been able to take the time to understand the technology and have been able to speak with nuance, it is really easy to generalize and condemn such a collapse, but to learn, to understand It is much more difficult to talk about what is and what is not.
This is a complicated issue. Both hearings were meant to find out what happened and ultimately to protect consumers. What I saw was Democrats and Republicans trying to figure out how to ensure this would protect consumers in the future.
you wrote twitter thread Earlier this week, you said FTX was a case of fraud, not technology failure. At the same time, however, there was considerable skepticism expressed by lawmakers at both hearings. It will be difficult for the crypto industry to shake its relationship with FTX. How can the industry convince lawmakers of much more than Sam Bankman-Fried, who was the face of cryptocurrency in Washington to many?
It will be a challenge. The state of crypto advocacy over the past few years has provided a strong boost to education. Clearly, we must continue on that path. Some lawmakers are determined. The difference here is that the demise of FTX has moved cryptocurrencies from being more of a choice for people to something they have to deal with. Members will be forced to face the legislative table. At that point, it’s up to us, and broader crypto advocates, to make sure we put the right thing in front of people to make sure they really understand the differences between technologies.
I think the need for regulation was echoed by almost all lawmakers, but there is disagreement about what it looks like. may mean existing frameworkSecond, for someone like Senator Elizabeth Warren, it’s new bill many cryptocurrency industries i think it’s inappropriateHow do you take a broad regulatory need and narrow it down to something lawmakers can actually agree on?
First and foremost, many high-quality proposals of a bipartisan nature have been submitted over the past two years, from Market Structure Bills to things like stablecoins. We must continue to build that bipartisanship. Trying to fill that gap is obviously very difficult. Legislation is difficult. But if you have an advocate in a bipartisan way, it starts from within actual parliamentary circles, but not only from the outside. We follow the way laws are enforced and changed.
What a lot of people are trying to do is lead with something like a stablecoin, something a bit more bipartisan. Obviously there are problems and the devil is in the details, but if there is movement on something where there is broad agreement that should exist, I think there is.
When you say they come from outside, do you mean people like you?
wider community. It is useful for legislators to hear from people who have government experience and talk. But I think it’s very important that people hear from her Web3 industry. Especially if they’re in their own district or state and creating a new one. Hopefully we can be one piece of that puzzle.
What impact do you think the fall of FTX has had on legislators’ appetite for legislation, and what kind of regulation are they calling for?
It is clear that cryptography is currently at the forefront of policy makers. Overall, it’s positive. However, continuing to work with policy makers, he believes that policy strikes the right balance between providing consumer protection, stifling innovation, and clearly not stifling Web3’s promised future. It is important to make sure that
The collapse of FTX is tragic. But ironically, that failure wasn’t his Web3 failure. They arose from centralized structures. This reinforces DeFi and his Web3 claims more generally. This shows the importance of chaining everything together in a transparent way without relying on a centralized actor for decision making.
You are in this position after working for an influential member of the House of Representatives Financial Services. He will chair the next parliamentary session. What impact do you think the change in leadership will have on legislation?
It is always difficult to legislate in a meaningful way in a divided government. This presents its own set of challenges. But having a champion head one of the House’s main committees will be an important aspect. There’s a bipartisan consensus, especially on the Financial Services Commission, but there are plenty of other committees that help foster conversations.
There was a stark contrast in the knowledge of cryptography expressed by lawmakers. Assuming your new role at a16z, any message on how portfolio companies should approach outreach to legislators?
People without a DC context are generally quite afraid of DC. Culture is not always welcome because they are afraid they will say something wrong. One thing I’ve tried to encourage people to do is go out and talk to members. Describe the situation and what you are trying to create. By and large, especially from a legislator’s perspective, they’re usually very open to hearing about cool new things coming up and how they can improve the lives of everyday Americans.
Especially in the technical field, when we’re talking about potentially complex problems, we have to find bridges to the knowledge gaps that exist. It’s like speaking two different languages. One of the ways I’ve been successful is talking through games and NFTs. There is a way for people to understand the concrete aspects. It was an epiphany moment for some members.
Clearly, regulatory uncertainty on topics such as securities hurts a16z’s own interests. What are your priorities in this new role?
I took on this position because Web3 is at a critical time. The last few months have been really tough. My main focus is to highlight the vast number of his Web3-based projects that are improving the Internet, and frankly, I recognize my role as a bridge between the Web3 community and Washington. doing.
What does it look like in reality?
I believe a16z is highly regarded in the Web3 community. As they reach out to Washington, it helps build coalitions from the outside that can make some complex issues easier for lawmakers. Being able to communicate effectively.
Washington DC has a very strong Web3 community. We are one piece of that puzzle, uniquely positioned to have a broad depth of technical expertise to help explain what needs to be explained.