- Polygon Labs agreed with most points in the consultation.
- The company urged HM Treasury to “engage in additional study” before regulating crypto mining and validating.
- Binance and others have also responded to the consultation.
“Regulation by force” has been the approach U.S. regulators have taken when regulating the crypto industry during the ongoing bear market.
However, other countries have taken different paths. For example, the U.K. recently released a statement inviting crypto companies for consultation. Now, multiple firms have responded to it, including Polygon Labs.
Polygon Responds to U.K. HM Treasury’s Crypto Consultation
Polygon Labs, the developer of the Ethereum Layer-2 scaling solution Polygon, has responded to the U.K. His Majesty Treasury’s Consultation and Call for Evidence regarding future crypto regulations.
In the response, Polygon Labs said it’s “broadly supportive” of the proposals set in the consultation.
“We are broadly supportive of the proposal set forth in the Consultation – HM Treasury’s recognition that it should aim to achieve the “same regulatory outcome” rather than imposing the “same regulations” on this new asset class and industry will allow for robust, evergreen laws and the phasing of regulation for this industry will provide additional clarity.”
However, Polygon Labs specified which parts of the consultation should be amended. For example, the company disagreed that all crypto assets should be defined as “specified investments,” which are various types of financial market assets that require oversight by a financial services regulator.
Instead, Polygon Labs argued that crypto assets like NFTs and other fungible tokens have no resemblance or the characteristics of a financial market asset. The company suggested HM Treasury have a section on “exclusions” from “specified investment” to eliminate such assets.
Polygon Labs also urged HM Treasury to “engage in additional study” before regulating crypto mining and validating activities.
“As a software developer who originally developed a proof-of-stake network, we respond to the question only as it pertains to validation. We do not believe there is merit in regulating validation activities in the UK and strongly encourage HM Treasury to engage in additional study before considering any regulation as it would pertain to validation activities.”
Polygon Labs isn’t the only one that responded to HM Treasury’s consultation. Binance has also put out a statement with its responses.
Binance Responds to HM Treasury’s Consultation
Binance, the largest centralized crypto exchange in the world, published its response to HM Treasury’s crypto consultation on Wednesday.
In it, Binance agreed with most of the points and offered a few clarifications. For example, Binance agreed that crypto assets should be left out of a definition of a “financial instrument.”
“It is important not to compel an explicit read-across consistent with the overarching policy objectives and principles in this consultation, and with globally consistent definitions and terminology.”
Binance also supported the introduction of a Cryptoasset Market Abuse Regime (MAR) to manage and mitigate the risk of market abuse specific to the challenges of crypto assets.
More than ten crypto companies have responded to HM Treasury’s crypto consultation. These include Aztec, a16z, Ripple, British Blockchain Association, and others.
On the Flipside
- HM Treasury is not obligated to listen to crypto companies and shape regulations according to what they say.
Why You Should Care
It’s encouraging to see productive conversations between industry leaders and regulators.
Read more about Polygon’s partnership with Google Cloud:
Polygon Labs Partners with Google Cloud to Drive Ecosystem Growth
Read more about Coinbase launching a new offshore exchange:
Coinbase Offers up to 5X Leverage with International Exchange Launch