Crypto

Former UK Chancellor Hammond to Chair Copper Crypto Exchange

Philip Hammond has warned that the UK is falling behind its EU rivals as a financial hub for digital assets as the former chancellor takes on a new role as chairman of crypto exchange Copper.

Hammond said the Mayfair-based fintech group had nearly closed a new funding round despite turmoil in the cryptocurrency market. The fundraiser is expected to value the company at around $2 billion.

But he warned the UK needed to speed up the creation of a more effective system regulatory framework governing digital assets to compete with countries that were already leading the race.

“The UK needs to lead in this post-Brexit,” he told the Financial Times before his appointment was announced on Thursday.

“He let himself slip behind,” he said. “Switzerland is further ahead. The EU is also moving faster. There must be an appetite to take measured risks.

Copper is a digital asset technology company that enables institutional investors to acquire, trade and store crypto assets.

He was forced to register in Switzerland last year after withdrawing his application in the UK. Hammond blamed this on the slowness of the Financial Conduct Authority, which he said could have caused him to lose customers when his temporary registration ended in March.

Hammond, who served as UK Chancellor from 2016 to 2019, said he hoped “British clearance will be granted in the future”.

“We really hope to come back to London,” he said. “After Brexit, the UK needs a strong financial services sector. We need to figure out how to become the go-to place to trade new asset classes. »

Hammond said there was a need for “better and more effective” regulation of the crypto industry.

The Treasury plans to reform regulation around the cryptocurrency industry, described by ministers as a way to create ‘effective regulation’ that would help make Britain a global hub for asset technology cryptographic and would encourage businesses to invest and innovate.

Hammond, who confirmed to the FT that “the majority of the money” has been secured for Copper’s new funding round, has been an adviser to the group since 2021 and has “a small stake” in the company.

He said investors included venture capital and private equity alongside “strategic” investors such as Barclays. Copper’s early backers included Alan Howard, the British billionaire hedge fund manager.

Hammond said he would ensure “strong governance” of the business and oversee the recruitment of people from more traditional financial services industries with compliance and regulatory experience, which would make Copper “the go-to player.” best governed and safest in this space”.

He added that Copper continues to add new clients and exchanges despite the downturn in the crypto market and the fallout from the FTX debacle.

Parts of the market, he acknowledged, still looked like the “Wild West”. He said FTX “has highlighted counterparty risk in the traditional crypto trading model,” and that has led to a “huge increase in interest” in Copper’s platform.

“We have managed to grow in a market that has shrunk by 70%,” he said.

Copper chief executive Dmitry Tokarev, who founded the group in 2018, said “Hammond’s public advocacy of the importance of connecting traditional finance to distributed ledger technology comes at a time when it is more than never necessary”.

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