Cryptocurrency is having a terrible year, so it seems is the British Conservative party. Since the start of the pandemic, Boris Johnson’s government has been fielding a succession of scandals.
Still, on Monday evening, British Prime Minister Johnson managed to cling to power by winning a confidence vote with 59% of 356 votes. However, 41% of Johnson’s MPs voted against his leadership.
In the lead up to the vote, many Conservative MPs and frontbenchers were vocal in their support for the Prime Minister. Some of the same MPs have also proffered their support for cryptocurrency.
Technology writer Dr Peter Howson pondered why the Tories love their crypto in a piece for Novara Media on Tuesday. Protos has decided to poke around in Parliament and review some Tories’ involvement and comments on cryptocurrency.
Last month, once the favourite to take Boris’ place, Chancellor of the Exchequer Rishi Sunak was slam-dunked in Parliament over his pro-crypto policies when a Labour MP likened him to a “crypto Ponzi.”
In an April announcement from HM Treasury, Sunak detailed his plans to make the UK a crypto asset hub. Measures include a plan to recognize stablecoins as a form of payment and attract their issuers to set up shop in the UK.
Not to mention, he’s keen to make sure the Treasury is getting what it’s due when it comes to crypto. Not least by an official UK non-fungible token (NFT) but taking into consideration how the tax system treats profits accrued from DeFi loans.
In the same month that Sunak announced his plans for his blockchain Britain, the former Health Secretary Matt Hancock made a speech at a Crypto Club Global dinner.
The member of Parliament for West Suffolk told Crypto Club members:
- at one stage, he was the only member of government speaking in favour of cryptocurrency,
- how the UK needs to do more to build the crypto ecosystem in the country,
- and bragged about using blockchain in 2016 to send money to farmers in Malawi.
However, in the bulk of his argument, he told members digging into their main course how the Financial Conduct Authority (FCA) is getting it wrong and is unwelcoming to the crypto industry.
“In the purchasing of financial assets, the attitude and principle that has underpinned centuries of success is caveat emptor,”
“I should have the right to lose as much money as I want,” said Hancock, met with applause. He later qualified that there should be some form of protection for the most vulnerable.
Predecessor to Sunak, Philip Hammond served as Chancellor between 2016 and 2019. The former minister still has a hand in government as a Conservative peer in the House of Lords. He also acts as a senior advisor for Copper.
The UK cryptocurrency startup calls itself the “institutional gateway to digital asset investing,” it reportedly handles $50 billion in volume each month. Copper raised $75 million in a Series B funding round in the summer of 2020. However last month, the firm failed to make the list of 34 crypto firms registered with the FCA. Instead, it was relegated to the temporary registration list.
According to the FCA, this gives them a stay of execution while they “make representations,” or have “winding-down arrangements,” or “were aware of what is required of them to conclude their application.” To operate in the UK the FCA requires tight anti-money laundering measures.
Citing persons familiar with the matter, the Guardian reported that the firm is considering a move to Switzerland. In any case, at its $3 billion valuation, Lord Hammond’s 0.5% growth shares are worth $15 million.
A bit further along the front bench sits Foreign Secretary Liz Truss, who once welcomed crypto but now tries to stop the Russians from evading sanctions with it. Back in 2018, as Chief Secretary for the Treasury, she was pictured chewing the fat about cryptocurrency at London Tech Week.
More recently, her parliamentary colleagues have urged Truss to ensure that crypto isn’t being used for sanction evasion. Indeed, the government fast-tracked its Economic Crime Bill, that Truss said would introduce powers to seize digital assets.
The bill intended to finally deal with the long-term issue of dirty money running through so-called ‘Londongrad,’ still allows six months for assets like property to be effectively redistributed, avoiding the new powers entirely.
In 2018, around the time he donated around $25 worth (around 0.004 BTC at the time) of Bitcoin to the Royal National Lifeboat Institution, Eddie Hughes made headlines by suggesting people should be able to pay for their council tax with Bitcoin.
The MP for Walsall North was given a junior minister brief to tackle homelessness in 2021. Back in his 2018 Bitcoin fascination, he produced a paper in the now-defunct FREER think tank to teach his constituents about blockchain and called for a Chief Blockchain Officer.
“Maybe in some ways I have not completely understood what the application could be, but the idea that transactions are more secure, auditable and unchangeable could have applications for my constituents,” he wrote (via FT).
MP for Tonbridge, Edenbridge, and Malling Tom Tugendhat was so incensed that crypto wasn’t mentioned in last year’s Queen’s Speech he addressed it in the preceding debate.
In the days-long parliamentary session following the speech where the government sets out its plans for the term ahead, Tugendhat said he was “bullish on Ether, not Bitcoin,” and mentioned the flippening — a hypothetical moment where Ethereum becomes more valuable than Bitcoin.
When the FT interrogated his comments a little deeper, Tugendhat said he had around £500 ($630) worth of Ethereum.
“It’s not like I put thousands of percent in there. I put pennies in there and they bounce around.”
“All I’m doing at the moment is using it to see how the thing works. I’m not investing in it. I don’t have a serious investment in it and I’m not going to have a serious investment in it, because I don’t — it’s not something I have,” said Tugendhat (via FT).
UK MPs have to declare significant investments in the Register of Financial Interests, the FT couldn’t find his ETH holdings reported last year and it doesn’t appear in the most recent edition either.
“Oh about £500? Something like that – not more. Peanuts,” Tugendhat said.
So what is it with Conservatives and crypto?
According to Howson, the Conservative’s preoccupation with cryptocurrency is all to do with a need to keep the City of London (aka London’s financial district) at the heart of finance.
“Over the years, industrial production outside the City has continued to take a back seat to financial speculation with nothing of much value produced for society,” he writes.
However, listen to the aforementioned politicians, it’s all about new technology and not being left behind.
“Cryptocurrency developers and exchanges are finding fertile ground in communities left behind by the mainstream global economy. And if they lose their money? They only have themselves to blame. As Bitcoiners say: do your own research. Or as Matt Hancock would put it, caveat emptor,” adds Howson.