The regulatory environment surrounding crypto is shifting stateside as the SEC takes aim at major players in the web3 world, promising to shake up business as usual with aggressive action.

This week on Chain Reaction, we sat down with David Nage, a principal at Arca overseeing their early-stage fund with a primary focus on blockchain and digital assets. On the podcast this week, we dug into a multitude of crypto topics impacting the web3 venture capital world, including struggles with the blockchain gaming sector and a renewed regulatory fervor from the SEC following this week’s report of an investigation into Coinbase.

You can listen to the full interview below.

In our conversation, Nage noted that the recent downturn has already provided plenty of learnings for players in the space, but notes that some of the biggest blowups have disproportionally impacted retail investors. “I wish that we as a society didn’t have to learn through failure, but it appears that we really learn via failure and that’s the way that we grow and prosper,” Nage says.

Nage says that while the regulatory agencies are pushing for investigations, plenty of venture investors are just hoping that they can provide more guidelines and pathways for startup players to operate within legal boundaries while embracing opportunities native to crypto. It’s a lack of guidance that has pushed plenty of venture-backed startups to wait and see before dropping their own token, Nage tells us.

“A lot of these founders understand that a token could provide obvious utility for distributing and decentralizing the authority of the company and could provide a lot of positive economic incentives for those that are participating, but without regulatory clarity they are pushing that off in a warrant for an indefinite period of time,” Nage says. “So I think that actually having that clarity could be really useful for the thousands of founders out there that are looking to innovate in the space.”

While Nage has some complaints about how the regulatory landscape has developed, he also notes that things have still moved more quickly than he expected. “To think [back] in crypto winter of 2018 that senators would be architecting certain policies regarding digital assets [today] is just a leap and bound and your mind just blows, it’s amazing.”

You can hear more of Nage’s interview by listening to our latest episode. Subscribe to Chain Reaction on Apple, Spotify or your alternative podcast platform of choice to keep up with us every week.