The U.K. is urged to consider a "more nuanced approach" to regulating digital assets. In a letter to the UK Treasury, the venture capital fund said: "A 'one size fits all' regulation of crypto asset trading would be inconsistent with the Treasury's core design principles of 'same risk, same regulatory outcome'". This was in response to a consultation paper first published by the British government in February this year. a16z Crypto said that both policymakers and regulators need to develop a "more unified" understanding of how decentralization in Web3 systems works. It argues that the regulatory framework should include a "principles-based analysis" that considers whether the structure of a particular platform or protocol itself has mitigated possible risks. Regulation should not unnecessarily hinder the decentralization of projects. In addition, a16z Crypto stated in the letter that the UK should not adopt the US approach. The SEC’s continued application of the Howey test for enforcement action has created enormous uncertainty, incentivized regulatory arbitrage, and created a severe drag on the entire Web3 industry. Furthermore, uncertainty increases the risk of information asymmetry between project developers and users.