Andreessen Horowitz (a16z) Managing Partner Scott Kupor told a U.S. House panel on Monday that “ordinary folks” are largely locked out of investing in token projects.

Kupor said in written testimony that the Securities and Exchange Commission (SEC) has “not provided clear regulatory guidelines for how tokens will be treated under existing regulatory rules.”

Kupor, whose own VC firm bets hundreds of millions of dollars on blockchain projects, argued during oral testimony that unclear securities guidelines have created a “very significant disparity” between the haves and the have-nots in the crypto capital markets. 

Tokens exist in a gray zone in the U.S., he said. Some may be untouchable securities, others might not. Crypto venture firms pay their lawyers big time to know where they can place their bets.

Casual investors can’t afford to conduct securities research on every iffy token.

“For ordinary folks, without that clarity from the SEC it really does mean that they're missing out on what we believe is a really important growth opportunity,” he said.

Instead, U.S. regulators have focused on policing bad actors following the scam-ridden initial coin offering boom of 2017.

“While this is laudable, it has failed to provide clarity for the many determined good actors who seek to develop blockchain projects that are both successful and regulatorily compliant,” Kupor wrote. “This inability to differentiate between good faith technology entrepreneurs and get-rich-quick schemes makes the SEC’s job of policing this activity even harder.”