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Philip Hammond has warned that the UK is falling behind its EU rivals as a financial center for digital assets as the former prime minister assumes a new role as chairman of cryptocurrency exchange Copper.
According to Hammond, the Mayfair-based fintech group has nearly closed a new funding round despite the turmoil in the cryptocurrency market. The funding is expected to value the company at around $2 billion.
But he cautioned that the UK needs to act faster to create a more effective regulatory framework to manage digital assets and compete with countries that are already ahead.
“After Brexit, the UK will need to take the lead in this area,” he told the Financial Times ahead of the announcement of his appointment on Thursday.
“It has allowed itself to fall behind,” he said. “Switzerland is going further. The EU is also moving fast. You have to have an appetite to take some risks.”
Copper is a digital asset technology company that enables institutional investors to acquire, trade and store crypto assets.
Last year I was forced to register in Switzerland after withdrawing my application in the UK. Hammond attributed this to the Financial Conduct Authority’s slowness, which may have resulted in the loss of customers when the provisional registration ended in March.
Hammond, who was British prime minister from 2016 to 2019, said he hoped “a UK license would come in the future”.
“We would very much like to return to London,” he said. “Post-Brexit, the UK needs a strong financial services sector. We need to figure out how to be the best place to trade new asset classes.”
Hammond said there is a need for “better and more effective” regulation of the crypto sector.
The Treasury Department has set out to make the UK a global hub for cryptocurrency technology and to create “effective regulation” on the cryptocurrency industry, described by ministers as a way to help drive business investment and innovation. Planning for regulatory reform.
Hammond confirmed to the FT that “the majority of the funding” 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. I own it.
He said investors include venture capital and private equity, along with “strategic” investors such as Barclays. Early proponents of copper included British billionaire hedge fund manager Alan Howard.
Hammond said he would ensure “robust governance” in the business and oversee the recruitment of talent from the more traditional financial services sector with compliance and regulatory experience.
He added that Copper continues to add new customers and exchanges despite the impact of the crypto market downturn and the FTX debacle.
He acknowledged that parts of the market still resemble the “Wild West”. He said it has led to “a tremendous surge of interest” in Copper’s platform.
“We have managed to grow in a market that has shrunk by 70%,” he said.
Copper CEO Dmitry Tokarev, who founded the group in 2018, said Hammond’s “public advocacy on the importance of combining traditional finance with distributed ledger technology is more necessary than ever. The time has come,” he said.
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