Lengthy-time Alphaville readers will keep in mind that again in 2018, after a sure cupboard minister — then a mere disgraced Tory MP — resigned from two appointments associated to blockchain know-how after we found a secret crypto pay deal, we noticed it match to provoke a sequence referred to as “What’s the Tory crypto story?” (This title will resonate should you occur to be over the age of about 30 and British.)
After that slight embarrassment for now Transport Secretary Michael Green Grant Shapps, the Tory crypto prepare has stored on chugging merrily alongside. There was the spectacular flop of Tory Baroness Mone’s crypto challenge, EQUI; there was then-chancellor Philip “Spreadsheet” Hammond selling blockchain as an easy solution for the Irish Border problem; extra lately there was chair of the UK overseas affairs committee Tom Tugendhat preaching the virtues of crypto by deploying unforgettable syntax corresponding to “when the queen’s head leaves the coin and goes on to the blockchain”. And earlier than any of them, in fact, there was David Cameron — a person recognized for his impeccable taste in all things financial.
It’s not simply crypto; it’s blockchain too. In a November report entitled “Blockchain Industry in the UK Landscape Overview 2021” by “Innovation Eye” and the “Big Innovation Centre”, the ruling celebration’s love affair with all issues associated to the distributed dream ledger over the previous 5 years is charted. It’s a pleasant and politically informative chart:
Simply take a look at that sea of blue! When you’re questioning concerning the block of crimson within the second line, nicely that’s Chi Onwurah, Labour MP for Newcastle Upon Tyne Central, who has a background in know-how. However when she mentions blockchain, it’s to say issues like: “For some, blockchain is a approach of avoiding authorities”, and that the “libertarian concept that know-how is the reply to all the things has pushed our regulatory method for too lengthy”. Music to our luddite lugholes, tbh.
Over on the opposite facet of the chamber, although, there’s a brand new crypto playa on the town. And the brand new pusher of digital currencies is none apart from king of virtual tears himself, Mr Matthew Hancock, a former cupboard minster and now mere disgraced Tory MP (you would possibly discover a theme).
Stepping into mattress with crypto is “very important”
Having resigned from his job as well being secretary following an affair with an aide, it appears our Matt has turned his sights in the direction of loftier issues. So lofty actually, one would possibly say he’s heading to da moon — the MP for West Suffolk’s present pinned tweet is the next:
It’s important the UK turns into dwelling to new improvements, like fintech and crypto currencies.
My piece in @CityAM on making Nice Britain the worldwide centre for monetary innovation post-Brexit ⬇️https://t.co/gcpuiGBU1Z
— Matt Hancock (@MattHancock) January 27, 2022
That’s proper. In response to Hancock, Britain shouldn’t simply embrace the famously above-board and secure world of cryptocurrencies however really grow to be “dwelling” to them, no matter that may imply.
From his piece:
Each second advert on the tube appears to be for cryptocurrency. Britain ought to be the pure place to develop new markets like this – with a liberal, progressive regulatory regime that enables this radical new innovation to flourish, and permits folks to take their very own dangers . . .
We want a dedication to a progressive, liberal surroundings for fintech, together with cryptocurrencies, which permits folks to speculate their very own cash as they select, to make – or lose – as a lot as they need. We should embrace trendy know-how to make life simpler for folks – for instance making funds, particularly worldwide funds, simpler and cheaper.
Yeah come on regulators! Why would you attempt to shield folks from shedding all their cash? There are adverts on the tube, OK? These items should be legit!
Britain ought to be welcoming, embracing, and main these adjustments. However over the previous few years our lead in fintech has run right into a reactionary threat aversion amongst regulators.
As an alternative we have to embrace change, not worry it. This implies setting up a regulatory regime that protects folks, particularly from any systemic dangers.
Um, is it simply us or does the ultimate sentence there slightly contradict the earlier paragraph? How can Hancock be urgent for a regulatory regime that protects folks and guards in opposition to systemic threat whereas concurrently be urgent for a much less risk-averse regulatory framework for fintech?
In his comments on crypto and fintech in parliament a number of days earlier, Hancock had gone even additional, declaring:
Submit Brexit, the UK has the prospect to be the house of fintech, which not solely will be an financial driver, however can assist to chop fraud and monetary crime due to the transparency it brings.
Now, we’ve got to be trustworthy: chopping fraud and monetary crime usually are not *fairly* the primary issues that come to thoughts after we take into consideration crypto and fintech, however we guess we must always give this man the advantage of the doubt.
However all this crypto and fintech and blockchain shilling — he instructed the Categorical final week that blockchain had “a variety of makes use of, by way of safe contracts and better transparency” — did get us questioning what was occurring. Was Hancock simply proving his techy credentials earlier than gearing up for a run on the management in a post-Boris future? Was he eyeing up a type of soft crypto jobs that Hammond recently landed? Or was there one thing else to it?
In our quest for a solution, we stumbled throughout the Linkedin profile of Matt’s brother, Chris. It seems that he’s the founder and CEO of a fintech agency referred to as Crowd2Fund, a peer-to-peer lending firm that claims to supply “a brand new technology of investments to pioneer a cultural shift away from the normal banking techniques”. The Guardian has written about this firm earlier than, again in 2019, reporting that:
As minister of state for expertise and enterprise in 2013, Matt Hancock labored within the authorities division accountable for organising the regulatory framework for crowdfunding.
In 2013, Matt Hancock instructed the Home of Commons: “We’re supporting crowdfunding on monetary phrases, not least by the brand new enterprise financial institution, however we’re additionally ensuring that it could function in a high-quality framework . . .
On a special event, Matt Hancock urged a fellow MP “to look additionally at peer-to-peer finance, whether or not fairness or mortgage, as a result of that could be a small however rising a part of the market that firms can look to when making an attempt to entry finance”.
Hancock’s urging, according to Hansard, was in October 2013. In response to Chris Hancock’s LinkedIn and Companies House records, Crowd2Fund was based only a few months later.
And Crowd2Fund isn’t Chris Hancock’s solely enterprise into the world of fintech — he has his finger within the blockchain pie too. He has an organization referred to as Finblocks, a “international, safety, compliance, deposit and funds system” that “permits shoppers to leverage the advantages of blockchain merely, simply and in a compliant approach”.
Final April, Matt Hancock was accused of “cronyism” by Labour, after he declared that he owned a 15 per cent stake in Topwood Restricted, an accepted provider to NHS England. Hancock’s sister, Emily Gilruth, is called as a director of the company on Corporations Home.
We requested Matt Hancock whether or not he thought there was any battle of curiosity in his advocating for boundaries to be eliminated for the fintech trade and for crypto and blockchain tasks, given his brother’s work. We additionally requested if he had any touch upon the timing of Crowd2Fund’s founding.
A spokesman for the MP instructed us:
As defined to the FT, this factless insinuation of mistaken doing is just not solely false and baseless however embarrassing. Matt has a long-standing experience in digital issues and the thought he shouldn’t discuss one thing he has detailed information of as a result of his brother is an entrepreneur is clearly absurd. That is unfounded hypothesis not journalism
We have been then despatched two up to date variations of the remark that took out the “embarrassing” bit and the “unfounded hypothesis bit”, and added that Hancock is a “champion of fintech”, however we most popular the unique.
We perceive that Matt Hancock has no funding in crypto nor any monetary curiosity in his brother’s fintech firms.