How to engage with U.S. policymakers | Collin McCune

Transcript

[Music] thank you thank you and good morning the uh the only thing more exciting than kicking off your morning with a policy and Regulatory conversation is following up with a second policy and Regulatory conversation so thank you for bearing with me I would venture to guess if I asked for a show of hands of how many people in this room have ever met their congressmen or their Senators it would probably be a pretty limited view I'm also willing to bet that if I ask that same question about how many people in this room know the names of their congressmen or their Senators it would also be a limited view but that's okay because most people don't most people

don't understand how to engage but from my perspective it's critical that we learn the tools to be able to make an impact not only on crypto but on all issues that face that the government faces so let's get into it what are we going to cover today fundamentals life of Congress how to engage and then current landscape think of my first two buckets here as a flashback to your eighth grade civics course or for my International folks in the room think American history 101 government 101 the third bucket how to engage we're going to talk about the tools the best ways to actually influence and make an impact on these lawmakers and then the fourth bucket is a what the hell is going on in DC I'll give you my current

most up-to-date state of play so we have to start with the fundamentals we can't have a conversation about the United States government how to engage lawmakers without talking about the three branches of government the the US government is based on the fundamental principle of checks and balances when the founders of the country were framing the Constitution they were so worried about becoming the British Empire a monarchy that they bestowed individual powers to three separate branches of government for the checks and balances you've got the legislative branch that has the ability to write laws you've got the executive branch which enforces the laws and the judicial branch which interprets the laws so think Congress the White House and executive agencies

and then the court system including the Supreme Court in order for a bill to become a law in this country a representative or a senator has to introduce a bill it must then get referred to a committee pass that Committee of jurisdiction and then come before each body for a full vote pass both the house and the Senate same bill and then go to the president's desk for a signature so just in of itself it's a pretty complicated process take the politics out of it it's a complicated process now I know I just told you and we just watched a three-minute video by the way good luck getting that out of your head that song um uh that the only way to create a law in the United States was through the Congress unfortunately it's not that that simple think of the way that people that

congressmen and Senators create laws in through the Congress as Frameworks so take for instance the safe drinking water in 1974 uh the United States Congress got together and they said hey look we think that the United States and the American people should have basic right to drinking water pretty good idea right now ins when they when they put together the framework they put together some baseline principles of how that should look but in the bill they directed the Environmental Protection Agency to actually write the underlying rules and the in and the specifics of that so think Congress put together all right everyone should have this basic right it should cover all 50 states EPA go in and you tell us exactly how much chlorine

should be in the water but with that rulemaking Authority they've also given them the ability to update the rules as they go so the same contaminants that existed in 1974 most of them probably still exist today but by by virtue of technology and chemistry there are new things that come on the market so they issue new rule makings to update the safe drinking water limits right so that's rulemaking the next one is an executive order this is on from a basic perspective a um a power bestowed upon the presidency that allows them to direct individual agencies to take a specific action now the most famous executive order of all time was the controversial EO that came from president Trump in which for on

National Security basis he banned about eight or nine countries the citizens of 89 countries from entering the United States now obviously very controversial ultimately the courts overturned that and it no longer became the law of the land um the third piece and the third bucket of this is case law now Michelle just covered a lot of case laws so uh just to be clear I'm not a lawyer so I defer her on all of these legal opinions but um for the purpose of this conversation think you know when Congress is building out these Frameworks a lot of times some of these laws are pretty vague and they're open to interpretation so people will bring suit on some sort of in some sort of case it will be tried in the courts and then ultimately the interpretation by that judge or series of judge or system of Judges based on

sort of the Supreme Court will ultimately become the law of a land three very famous uh Supreme Court cases that obviously have made a huge impact on American Life Roe vivoid for a long time was sort of the representative law that governed abortion in the United States it was recently overturned by the Dobbs decision Brown vs Board of Education thinks segregation ended segregation the United States and then the SEC versus W.J Howie company the Howie test uh which you know governs the basic principles of Securities laws in the United States and of course because we can create laws in many different ways there are also many different types of policy makers you've got members of Congress the president of the White House team agency and cabinet heads that obviously have

rule making Authority and then state and local officials Eric Adams the NYC mayor's up here but also think Governors and council members and things like that now I want to spend um the next little bit talking about the life of Congress because I think it's important for us to understand what drives these people what motivates them if we're going to be able to effectively engage in a particular way so first up what drives them three buckets constituents stakeholders and elections think of constituents as everyday voters in the house there are 435 members of the House each of them represents about 750 000 people in the Senate there are two senators per state each each of those Senators represents all of the people all the members and residents of that state

um so obviously if the people that elected you in and that need to continue to elect you in are your constituents you obviously need to be beholden to them and regularly interact with them so that's the first bucket the second bucket is stakeholders everyone in this room is actually a stakeholder you are all startup Founders you all have very interesting stories people are going to want to hear from you including members of Congress Patrick McHenry who will be you later he will want to hear from you that's part of the reason that he's here when I interact with the government most of the time unless I'm complaining my local government about like a pothole or something like that generally speaking I'm engaging as a stakeholder I'm a representative from from Andreessen Horowitz I'm advocating on my registered

lobbyist I'm advocating on behalf of AI crypto issues and then just general Venture Capital issues um but that doesn't mean that you have to be a company to be a stakeholder there are plenty of other informal coalitions and non-profits that Advocate from everything from crypto to Ocean conservation and then the third bucket which is probably the most important is elections ultimately this is what drives people they want to they want to remain an elected office and they have to campaign regularly in the house they they elect new members every two years so you must run for re-election every two years in the Senate it's every six years so as you can imagine this is a pretty this is a pretty tight turnaround for a lot of folks they're constantly fundraising and campaigning which also dictates based on

the information that they get back from constituents and stakeholders and then their their ability to win election that dictates sort of their individual policy positions and the things that they say publicly so who are the players so bear with me here for a bit the chart that I've put together here is pretty crude uh this is not you know a perfect representation of how things actually operate in the Congress but from the purpose of this conversation I wanted to give everyone a little bit of a visual I chose the house but a similar setup sort of maps over to the Senate as well at the very tippity top you have the Speaker of the House think of the speaker of the house as sort of like the CEO of the House of Representatives anything within the house rules which is agreed upon by all members of the House

any anything within that space pretty much the speaker has full Authority and autonomy to do what they want um nothing gets done in the House of Representatives and let the speaker signs off on it directly below that you have the majority leader the majority Leader's principal function is to schedule the House of Representatives no votes occur without without the majority leaders sign off and then they also determine which bills come in front of the House of Representatives uh for a vote which obviously you know if you can't get a bill even up for a vote unless the majority leader signs off you can imagine that's a very powerful position to have the third one down is the whip this is an interesting position the whips principle function is to is to encourage and ensure that members of a given party

vote in the direction of a policy priority that is put before the house so if the majority leader schedules a bill the whips job is to ensure that all the members from that party vote the direction of that bill right whichever whether it's yes or no um below that is the conference and caucus chair think of those as sort of the education arm and the communication arm for an individual party the next bucket is committee chairs we're going to hear from a committee chair later this is not a perfect example because a lot of times committee chairs actually have somewhat equal authority to the Whip or the leader of the speaker in some circumstances but these are individuals that are elected by their peers to be subject matter experts we have everything from energy to financial services again we'll hear

from the financial services chair later on but nothing no bills can actually make it to the house floor unless the committee chair of of jurisdiction signs off on it first then it must move forward and then at the very bottom of this is the rank and file members these individuals think of these folks as sort of like the constituency to the top tiers right the the the top buckets committee chairs speaker leader whip conference Shares are beholden to these individuals these individuals sit on their committees they offer policy ideas and ultimately they can't move anything through unless these individuals actually vote the way that these these people want to so they they need to be very responsive to these Rank and file

members and then before we move on and be remiss if I did mention this as a former staffer the importance of Staff staff are incredibly critical these are the subject matter experts that work in these individual offices all of these buckets of people have individual people that work for them that are very influential and also very smart on specific topics but staffer staffer worked hard and they're stretched then um you know for instance in a in a given office you want to you reach out to your local Congressman or something like that and they and they introduce you to their Tech policy staffer that individual not only is probably responsible for all the political and policy fault lines of the broader Tech Community they're also responsible for All Tech all tax issues

maybe they handle gun issues maybe they have to handle abortion there's a million different things that they also have to cover they divide and conquer you know based on sort of a staff of four or five so what do they even do I like to think about this in two different distinct buckets in session out of session and what do I mean by that in session is the period of time where this where the majority leader has scheduled these people to be in town and actively voting right so they're in DC they're doing a whole bunch of official activity what does that mean the two or three primary things that they're doing when they're in town is they're holding official committee hearings which is an opportunity for them to hear us from subject matter experts on a given policy topic so that it helps shape the

individual policies and bills that they're putting forth and then the second piece is markups markup is an interesting term but it actually it exactly how how it sounds is what it is this is an opportunity for all members of a specific committee to get together and consider specific bills um debate them and then offer amendments and then eventually pass them through so they can move on to the house floor when they're out of session um most of the time they're spending back home in their districts or in their States they're meeting with the constituents they're doing local ribbon cuttings which is sort of more of the ceremonial stuff and then occasionally they're doing uh town halls and international diplomatic travel which is called Congressional delegations or

codels for short this is a good opportunity for them to go and meet with troops internationally and also international local leaders and things like that so possibly the most important slide of this entire thing is the marriage between policy and politics I think a lot of times when we're when I'm engaging with portfolio companies they're like look the policy is obvious why can't we just get this done and ultimately the answer is politics are complicated I think this is probably I think actually think of this think of policy as the idea and politics is the negotiation it can seem so obvious sometimes what the policy position should be in reality the politics are always sort of behind the scenes and at play which is the negotiation

all right so these are my this is my uh framework for the five stages of legislating think of this as kind of like the five stages of grief um crypto is actually a really wonderful example for this so when crypto first started think early 2010s right there was a lot of disinterest from DC people were like oh cool look like these guys are creating like funny internet money like I don't really care it's not gonna become this big thing right then eventually it started to take hold celebrities started getting involved there was a lot more interest people like okay wow this could actually make a huge difference in the world let's get behind it I want to be sort of the Cool member of Congress that wants to get out there and support new tech and stuff like that eventually it hits critical mass and it gets so big and

sometimes certainly there are some nefarious actors and we all know that there are some of those people in in Congress But ultimately you hit a period of time where where there are people in DC that believe these things are a threat right and once they go into that mode not only does it be sort of like a political platform that they can run on it also becomes you know a mission of theirs to try and kill something um once you move out of the threat stage people realize okay well look this thing isn't going anywhere so we now we need to have some sort of negotiation about how to actually build a framework around it right which means there are people here that just want to run a policy of just completely killing it off and there are other people here that hey like this

is the greatest thing this is going to completely change the world those two different policy positions is a very difficult thing to come over but that's the struggle phase and that eventually once you get the through the struggle phase you're able to create law um my personal opinion is that I think crypto is sort of exiting the threat stage and moving into the struggle stage the problem is the struggle stage can take a while so why is legislating so so hard um I think Thomas Jefferson summarized it perfectly um I'm certainly not an advocate of frequent and untried changes in laws and constitutions I think moderate imperfections had better be born with ultimately the reason is the system was created to be difficult the whole

purpose of trying to ensure that we have a system of checks and balances and that we didn't end up with one party rule to try and steamroll over and completely change the country is because they designed it to be a difficult process to actually fundamentally change laws so what's going on let's let's talk about a little bit of a current landscape here what's the current state of play the good news is there is a lot of overlap with what's going on in both the House and Senate and there are two primary functions from a legislative perspective that people were trying to address there is a what we have broadly called sort of in the crypto policy Community as a market structure Bill and then there's a stable

coin bill and there are there are a number of different uh proposals out there that are trying to attack this from different angles and what do I mean by market structure bill right at the heart of the issue how do we Define a security and commodity from the existing communities and commodities laws what needs to be updated and then how can we allow centralized exchanges to register with these individual agencies and then come into a sort of a moderate regulatory regime that's the two basic principles from Market structure bill the um from a stablecoin perspective it is how do we offer a pathway for for stablecoin issuers Fiat backstable coin issuers to register with a federal agency and then also be under the

regulatory perimeter and be able to operate sufficiently now within each of those is a very complicated web of state and federal law obviously a lot of history and case law precedent that has come into a play so it's it's been difficult the good news is particularly in the house and you will hear from one of the one of the key sponsors of not only stablecoin legislation but a future proposal on Market structure later this afternoon there's there is a ton of movement for two major chairmen that I think also have the support of their individual leadership um very you know the other positive piece here is there's bipartisanship in the Senate the limit the Llama still

brain responsible Financial Innovation Act was a landmark piece of legislation that came out last Congress it is being modernized and then will be dropped again this year at some point soon um but it seeks to tackle all the issues that I sort of just laid out and then what the heck is going on with the administration unfortunately not much um in the past uh a little over a year ago uh the President issued an executive order which we walked through earlier this executive order unfortunately didn't have much teeth to it it was really a direction to Federal Agencies to come out with a bunch of reports the reports some of which were sort of uh benign and others were quite inflammatory making recommendations that you know uh are completely untenable for

the a broader crypto ecosystem so what's being done what are we doing on a regular basis from a lobbying and engagement perspective the first piece here is we're trying to bridge the gap between committees and I think we've been fairly successful particularly in the house what do I mean by Bridging the Gap between committees like that doesn't make any sense right ultimately committees have very specific set jurisdictions in this case you've got the financial services committee who is historically represented and and had jurisdiction over things like the Securities Exchange Commission and all specific Financial products on the flip side the house agriculture committee and the second agriculture committee has has full oversight over the cftc the Commodities future trading

Commission and there is a question about whether or not tokens are securities or Commodities and where that line gets drawn right so if you have two specific you have two separate committees that are trying to interact with one each other obviously they're going to have to have some sort of coordination and in individual ones are going to want to try and eat up the space to be sort of like the hero and the person that actually owns digital assets because it's kind of a cool new sexy topic so we have been trying we've been working very hard to make sure that they are interacting well with each other and working together to try and put forth something that's positive we believe that's going to come in the next couple months or so the second piece is we're making changes to existing proposals we're trying to

update modernize existing proposals that were first good steps but didn't have a chance based on the politics and some of the underlying policy to actually get over the finish line and become law so we're working on that and the third piece is we're trying to establish a negotiating field remember earlier I talked about how we're now exiting the threat stage and into the struggle stage and in that there are people over here that want to kill it I think everyone probably knows some of those people's names and there's people over here that think we shouldn't regulate it at all that's obviously not a good system for trying to negotiate because you have two people that are on too far ends of the end of the ends of the spectrum I will make an American football reference but think of it this way right we need to

establish the playing field which is which is 100 yards you know End Zone in your either side crypto right now it's like a 300 yard game you know we've got people all the way over here and all the way over here we need to get two moderate proposals in both the house and the Senate to set up those two end zones so that we end up at the 50 yard line which is something that's reasonable that everyone can take on so what does all this mean for you right I hear three hear the three most common myths that I hear from people when I engage with them and say hey look like I really want to get involved in DC I just don't know how here's what I'm thinking first is only lobbyists can engage with lawmakers or I need to hire a lobbyist just flat out untrue you you are I mean

for those of you in the room that are American citizens all of you guys have a congressman you have a senator these people are designed to be able to hear from you on a regular basis that is how the system of government is assigned the second is my voice won't be heard like these people are too important they're running around all over the place couple things on this one they have staff and those people not only do they work back home in the states and districts but they also work in DC and they represent the the member of Congress on a regular basis and two they spend an incredible amount of time trying to respond to each individual person who reaches out to the office both by phone call email Twitter Facebook all these different social media channels so you absolutely your voice can be heard and the other thing

I'll say here is you guys aren't just regular constituents you are very interesting startup Founders that people want to talk to they want to hear your expertise trying to boil these things down and bring them up to speed is very very important and the third is I have to be of the same political party um you know from a first principle's perspective regardless of political party these people are there to represent you no matter your political affiliation and also here's the real reality there isn't some sort of public database that you know issues you how you've voted over the last couple Cycles so you'll be fine they won't know that you're a Democrat or a Republican or an independent or wherever you choose so how to engage in when

the first bucket is join build a web 3 Coalition we're all in web three um and like what the heck is a coalition what does that actually really mean Coalition can be everything from a very very formal organization with a head or a CEO that runs these types of things that you can be a member of like a trade Association all the way down to a group of five of you that want to meet in the CSS boardroom and say hey look we really care about all the same things and we're going to call ourselves like the cool kids club and we're going to advocate for web 3 positions it can be as simple as that but I do think helping organize people in a specific way coming together and making your thoughts as simple as possible and then illustrating them to

lawmakers is is a critical critical component of all this and I would be very encouraging of it the second piece is once you've sort of built out this Coalition or you've decided that you want to be a part of a coalition the second the second piece of this is reach out to staff every single one of you has the ability to go online type in your address and it'll tell you exactly who your Congressman or your senators are once you find that you scroll to the bottom of their website you look at the bottom of it and it gives you all of the different phone numbers and email addresses that you can contact these people on a regular basis I would encourage you to pick up the phone ask to talk to their Tech policy staffer introduce yourself and say hey I'm XYZ I'm the founder of XYZ and Company

and build that relationship talk to them very simply about what it is that you do and how important blockchain technology is to you that will start to make an impact I can guarantee you that there's probably four five six organizations right here in La that would be more than willing to have a conversation with you and that that can be a bridge into some of these offices and then the third piece is this all doesn't have to have to happen on the federal level I I think the federal level is very important but part of this is we're not getting a Groundswell in DC of local leaders council members Mayors things like that that are going and talking to these Federal officials on a regular basis go to a local organization go to a local talk you know go to Open Mic at Council

member's office I don't know if you guys have ever seen the YouTube clips of Chad and Brad or something like that where they go to LA City Council and they ask for like a yacht program it exists I mean it's funny but that stuff exists you can show up and you can go to a mic and say hey blockchain technology is really important to me and leave it at that and that in and of itself has made a huge impact so what are the key takeaways here first don't wait to engage start now it's as simple as picking up the phone and just trying to make a make a phone call and quickly advocating on behalf of something that you believe in the second piece is take the time to learn how DC Works um we have a big policy team that are happy to be resources for you but it can

be as easy as curating your Twitter and making sure that you're sort of following some people that are of interest there are free public newsletters that come out every morning that do an excellent job of breaking down the fault lines in DC punch bowl Politico um everyone in DC reads these things they are very educational and they help explain Dynamics very well third is remember that legislating was was designed to be a very hard process we're going to get there it's just going to take a little bit of time and the fourth is um you know keep your chin up uh I think that you're going to hear a much more positive tone from the member of Congress that we have coming in here later who will be able to answer some additional questions but the key is keep building the more use cases that we have

the more positive things that we can show these lawmakers the better off we will all be and the better talking points we all have so that don't worry this is easy happy to take any questions how's it going Louis from the Shield team thanks for the talk yeah I was wondering if you could provide a little bit more of like high level behind the scenes of like wolf forces our app play in DC like obviously you know you have coinbase on one side yeah but it's not just like private versus like public right there must be like the banks like are the banks picking sides like yeah I kind of want to know those details like okay like you know the politics of it like what what

is the real issue yeah so what's the landscape right yeah so who's on what team so um let's just let's talk about lawmakers first and then I'll get to other stakeholders in the space because I think the banks is a is a really good point to bring up at some point within the last three years and I don't think it was a specific moment although FTX has sort of catalyzed this feeling their I think that there were some outside groups you know I I think some of these trade associations and these uh there's like consumer groups that are out there that are sort of advocating behind the consumer But ultimately you know while they're doing a lot of good work they're also sort of business organizations that need to make a lot of money

I think that there was a shift in some of the fraud cases they saw and they started to sort of fundraise off of the back of crypto bringing crypto you know bringing crypto into Justice you know bring it into a regulatory perimeter so I think that there was a big shift from lawmakers at some point um within the last three years and now they very much believe crypto is a bad thing um I don't think that's a vast majority but they're also very very loud you know so you have the consumer Advocates over here that think that this is bad for consumers big group of them that's the first bucket that are are particularly putting a lot of impact on Democratic members from a stakeholder perspective I think traditional financial

institutions and I think the banks fall into this category are absolutely um they don't know what to make of it uh but there are definitely some Bank groups that are working against crypto behind the scenes absolutely and I think once we eventually get to a situation where they believe a bill actually might be able to move which I think we're getting to within the next several months you will hear many more financial institutions traditional financial institutions and Banks come out vocally and probably oppose some of that legislation and or say look we're regulated this way any crypto company out there should also be regulated this way that's sort of the talking point that they've been using which of course right like the technology is different

we all know that in this room thank you yeah excellent talk and I love the uh visuals that you showed by the way thanks thank you I hope they were helpful absolutely one of the questions I have is related to the coalitions like and you give a few examples of the best coalitions that you've seen like what like the size of them what type of activities like they would do the Cadence of how they meet like and to actually have like a very strong impact like can you talk about some of these coalitions yeah so um I think the most traditional two different buckets right and like truly they almost serve two completely different functions there are major huge trades trade associations in

DC you know a16z is actually a member of a couple of them um one of which Advocates on behalf of crypto um but you know think you know everything from the banks to labor unions to Big Pharma they all have these major trade associations that have a lot of money involved in them right they have hundreds of members think every big pharmaceutical company is a member of this they hire a huge team of people it's a formal organization they held all kinds of events they go in there Advocate all the time they're very effective um and part of the reason that they're effective is because they're very concise on their messaging and they are also defending against bad things happening to them rather than trying to proactively get something done so I do

think um these there is a space for these big entities because I think that they help fill a void in an echo chamber in DC and push the message in the right direction that they want it to go now on the flip side and I think what I was more morning allude to so actually thanks for asking this question is from a Grassroots perspective you know people back not in DC not going out to DC a lot you're back in sort of the district or the states I've seen incredibly effective groups of like 15 or 20 people that are passionate about it that are just out there taking the time to educate their members like being persistent hitting up staff taking the time to really boil things down very

simply for them because look like I you you you can't tell me and there are very very few people out there that once you actually kind of explain to them the fault lines of of blockchain tech and or crypto you know and how many different aspects of technology and the web it disrupts that they won't come along you know so I think um I think there's like a there's a great group of people in the Boston area that have been fantastic Advocates to some of the Massachusetts members um there's a representative Jake ackenklaus who's a big crypto supporter that has gone in and talked to some of these some of these kids from MIT and Harvard that have made a big impact on them because it's just it's genuine they're not talking to some like someone

like me who has spent my career learning to talk to lawmakers you know they're like okay great I don't want to hear from another I don't want to hear from another guy like Colin I want to hear from an actual practitioner that is really impactful and that can sway an individual member once you get one member it's like a kind of a network effect you know it just continues it continues to boil around us particularly if that's a senior member of the committee right thank you building on that question are these very specific I'm asking because we're building particularly Iran and consumer application in the beauty industry um and I and I worry that um that regulatory framework for tokenization gets hijacked by these

extreme defy scenarios and yeah like almost like there's a lot of people in the room they're built for gaming and from how this system works effectively are those coalitions or like even the regulatory framework is it perceived as a category specific application or is it is it just like one blockchain rules it's an awesome question um I will say I mean even Brian and I sitting in the back right we've we've been trying to help um you know a group of people that are a little bit more formidable in the nft space kind of have like a separate nft conversation that doesn't get sort of dragged into the broader or at cryptocurrency um

I think first and foremost yes there absolutely a space to sort of be issue specific about these coalitions and and try and draw a line between all right look I'm not trying to disrupt some sort of financial services product I'm actually trying to disrupt social media or something like that the problem is we're kind of all in Noah's Ark together right now because ultimately we're fighting for tokenization which means that we have to have some sort of clarity that that allows us to sort of exit the Securities laws or at least give us some sort of framework by which you know the next ethereum can be built because that's sort of the Catalyst of it all so one of the ways that we've been approaching it is let's bring in some some use case examples that don't

have to deal with just sort of traditional disruption from Financial Services let's bring in some people that are like building on top of blockchain that is you know some basic things right so it's great and it's good it's super super helpful feel free to form non you know non-traditional financial services use cases and push that message because I think that's very helpful but just know we all have to sort of collectively solve this core issue so that we can unlock the rest of it thanks awesome well thank you so much Colin that's fantastic thank you guys [Applause] [Music]