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The former Chancellor of the Exchequer in the UK, Lord Philip Hammond, has refuted claims that he might have engaged in illegal lobbying for the cryptocurrency firm Copper.
Hammond currently serves as the Chair of the Switzerland-based crypto company.
He has held this position since January of the previous year, having initially acted as an advisor in August 2021, followed by a role as a Senior Advisor starting in October of that same year.
According to British regulations, Hammond was required to seek guidance from the Advisory Committee on Business Appointments (Acoba) prior to accepting private sector roles during the two-year period following his resignation as the UK Finance Minister in July 2019.
Acoba also prohibits ministers from lobbying their previous departments during this timeframe.
While Hammond’s official roles with Copper are outside of this period, the actions currently being examined occurred within it.
A report from the Financial Times, which submitted a Freedom of Information request, indicates that Hammond facilitated a meeting between Copper CEO Dimitry Tokarev and UK Treasury officials in March 2021 after then-economic secretary John Glen informed civil servants that the former Chancellor would serve as an intermediary.
Hammond informed Glen that Tokarev was “incredibly impressed” with the meeting. A week later, Hammond and then-economic secretary John Glen followed up with a scheduled call.
Hammond “emphatically” denied to the FT that his actions on behalf of Copper amounted to lobbying. He also stated that he did not attempt to persuade Glen to arrange a meeting with Copper.
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Britain’s path to regulation
The UK has adopted a more favorable stance towards cryptocurrency firms compared to the US, yet it still trails behind regions such as the EU, Canada, Singapore, and Abu Dhabi, which have provided clearer guidelines regarding what companies are permitted to do.
At the end of the previous year, the British government announced intentions to regulate cryptocurrency within the framework that governs traditional financial activities.
The proposal indicates that cryptocurrency exchanges operating or targeting customers within the UK will need authorization from the Financial Conduct Authority (FCA).
However, the proposal does not extend to regulating DeFi. Based on feedback received during the consultation process, the UK Treasury contends that “it would be premature and ineffective for the UK to regulate DeFi activities currently. […] Instead, the government will support international efforts through participation in both the FSB and standard-setting organizations to inform a future domestic framework.”
Former FCA Chair Charles Randell criticized the decision to regulate cryptocurrency using existing policies, asserting that the sector presents unique risks and necessitates tailored legislation.
In January, Randell disclosed that the FCA had faced “political pressure” to welcome cryptocurrency firms into the UK following a series of enforcement actions in the US.
HM Treasury has tentatively indicated that it will introduce secondary legislation related to cryptocurrency later this year.
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