a16z warns that there are loopholes in the encryption regulation bill and calls for amendments to protect investors

[BiTui] According to reports, venture capital firm Andreessen Horowitz (a16z) is urging U.S. lawmakers to modify a draft of an encryption regulatory bill, warning that the framework may have serious loopholes that jeopardize investor protection mechanisms.

In an open letter to the U.S. Senate Banking Committee, a16z suggested that regulators address the loopholes in the proposed encryption legislation. This letter is a formal response to the discussion draft released at the end of July. The discussion draft is based on the CLARITY Act, which aims to solicit industry opinions and advance regulatory legislation for crypto assets.

a16z specifically pointed out that there is a problem with the definition of "ancillary assets" in the draft, which refers to tokens sold through investment contracts that do not grant the buyer equity, dividends, or governance rights. The letter stated: "The structure of 'ancillary assets' should not serve as a legislative basis without significant modifications."