Andreessen Horowitz expands with crypto-focused UK office

12 Jun 2023

Chris Dixon, founder and MD of a16z Crypto, at TechCrunch Disrupt 2022. Image: Kimberly White/Getty Images for TechCrunch (CC by 2.0)

A16z is moving its crypto focus to the UK as the industry faces a crackdown by regulators in the US and abroad.

VC firm Andreessen Horowitz – or a16z – is expanding overseas for the first time, with a new office in the UK focused on the cryptocurrency sector.

The company’s crypto venture arm – a16z Crypto – is leading the push into the UK, with a belief that the country is a more hospitable location for crypto and Web3 start-ups.

The new office is expected to open later this year and will be focused on growing a crypto start-up ecosystem in the UK and Europe.

The decision comes amid a regulatory crackdown in the US that is targeting some of the biggest crypto exchanges in the world. Last week, the US Securities and Exchange Commission sued Binance and Coinbase for allegedly acting unlawfully in the country.

Chris Dixon, MD and founder of a16z Crypto, said the UK is taking a regulatory approach to the Web3 sector that is “uniquely tailored to blockchain and digital asset regulation”. Dixon said the country is taking a “sandbox approach to regulation” and creating policies that incentivise start-ups to pursue decentralisation.

“The crux of the argument is that the benefits of Web3 will only be achieved if the underlying infrastructure is decentralised,” Dixon said. “But it takes time and a runway for projects to grow from a centralised start-up to a truly decentralised network.

“As a result, we need regulatory frameworks that facilitate decentralisation, not impede it. While there is still work to be done, we believe that the UK is on the right path to becoming a leader in crypto regulation.”

The company plans to host its Crypto Start-up School accelerator programme in London next year to draw in new Web3 start-ups.

Dixon said the company’s crypto arm remains “heavily invested” in the US and is committed to working with US regulators to “push for more regulatory clarity for crypto start-ups”.

Crypto concerns

Andreessen Horowitz has betted big on crypto in the past. Last year, the company launched a $4.5bn fund for crypto start-ups, which brought the VC firm’s total crypto funds raised to more than $7.6bn by May 2022.

But the sector has faced multiple challenges since then, with the collapse of crypto exchange FTX and the recent regulatory pressure in the US.

Binance is also facing pressure in other countries, as a regulator in Nigeria claims the platform is operating illegally in the country.

The UK is also taking certain measures that could hamper the sector. The country is bringing in “tough” new rules later this year to reign in the advertising of crypto assets, due to concerns the market is unregulated and risky for investors.

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Chris Dixon, founder and MD of a16z Crypto, at TechCrunch Disrupt 2022. Image: Kimberly White/Getty Images for TechCrunch via Flickr (CC by 2.0)

Leigh Mc Gowran is a journalist with Silicon Republic