Crypto

Ex-UK Chancellor Hammond takes over as chairman of crypto exchange Copper

Philip Hammond has warned that the UK is slipping behind 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 almost closed a fresh round of funding despite the turmoil in the cryptocurrency market. The fundraising is expected to value the company at approximately $2 billion.

But he warned that the UK needs to move faster to create a more effective regulatory framework for digital assets to compete with countries that are already ahead.

“Britain needs to be a leader in this area after Brexit,” he told the Financial Times before announcing his appointment on Thursday.

“It allowed itself to slide backwards,” he said. “Switzerland is ahead. The EU is also moving faster. There has to be an appetite to take some risk.”

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

It was forced to register in Switzerland last year after withdrawing its application in the UK. Hammond blamed the Financial Conduct Authority’s slowness, which he says may have caused it to lose customers when its temporary registration ended in March.

Hammond, who was Britain’s Chancellor from 2016 to 2019, said he hoped “UK approval is forthcoming in the future”.

“We really hope to be able to return to London,” he said. “After Brexit, the UK needs a strong financial services sector. We need to think about how to become the location of choice for trading new asset classes.”

Hammond said there is a need for “better, more effective” regulation of the crypto sector.

The Treasury is planning a reform of regulations surrounding the cryptocurrency industry, which ministers describe as a way to create “effective regulation” that would help transform the UK into a global hub for crypto asset technology and businesses to encourage investment and innovation.

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

He said investors included venture capital and private equity, in addition to “strategic” investors like Barclays. Copper’s early supporters included Alan Howard, the British billionaire hedge fund manager.

Hammond said he will ensure “robust governance” of the company and oversee hiring from more traditional financial services sectors with compliance and regulation experience, making Copper the “best managed and safest player in this space.”

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

Parts of the market are still similar to the “Wild West”, he admitted. He said FTX has “highlighted counterparty risk in the traditional crypto trading model” and this has led to a “huge surge of interest” in Copper’s platform.

“We’ve managed to grow in a market that’s shrunk by 70 percent,” he said.

Dmitry Tokarev, Copper’s chief executive, who founded the group in 2018, said Hammond’s “public advocacy of the importance of connecting traditional finance with distributed ledger technology comes at a time when it’s needed more than ever.” .

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