Exclusive: minister leading UK's push to be cryptocurrency haven has shares in crypto-backing investment fund
Andrew Griffith told MPs that he spends more time focused on the crypto industry than any other part of his brief
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The Treasury minister who is leading the government’s efforts to turn the UK into a “global hub” for crypto asset companies has a financial interest in an investment fund which has a significant stake in the sector.
Economic Secretary to the Treasury Andrew Griffith is an investor in Firstminute Capital, a venture capital fund which backs tech companies and has significant interests in the Web3 and cryptocurrency sector. The Treasury said Griffith’s interests were “properly declared in line with the ministerial code”.
Senior ministers including Rishi Sunak have met with a number of crypto firms in the last two years which have been subject to criminal investigations or been ordered to pay fines by regulators in the US.
The former head of the UK financial regulator has criticised the Treasury’s approach to creating a new regulatory framework for crypto assets, noting that speculative cryptocurrencies “serve no social purpose” and have “often impoverished vulnerable people”.
‘Gambling, pure and simple’
Treasury minister Andrew Griffith has a financial interest in Firstminute Capital, an investment fund with assets reportedly worth around $300 million.
Firstminute focuses on investments in the tech sector, and has a particular interest in the Web3 space - the name given to products and services linked to Blockchain technology, of which crypto assets are a major part.
Firsminute has invested in Argent, one of the world’s largest crypto wallets, which states that its users have stored over “$1bn in crypto assets in their wallets,” and Ramp, a platform through which users can purchase crypto assets including currencies and NFTs.
Firstminute does not disclose the full list of companies it has invested in, and the Treasury declined to comment on whether it had met with or been in contact with any firms connected to Firstminute.
NationalWorld understands that Griffith first invested in the fund in 2016 and has not made any new investments since joining the government in 2019. A HM Treasury spokesperson said: “These interests were properly declared in line with the ministerial code.”
Simon Youel, head of policy and advocacy at the Positive Money think tank, said: "The fact that the City Minister has financial interests linked to crypto and has been lobbied so hard by the industry may go some way to explaining the government’s continued enthusiasm for turning the UK into a playground for dodgy crypto ponzi schemes.
“Luckily the government has abandoned its pathetic plans to cash in on the NFT hype - it also needs to abandon the race to attract crypto asset bubbles which offer no value to society before more damage is done.”
Griffith talked up the government’s work on crypto asset regulation in two speeches to industry last month, telling one conference that the UK is “capitalising on the potential benefits offered by crypto… and unlocking further growth opportunities and innovation”.
In February the Treasury announced plans to regulate crypto and opened a consultation. It said it will “seek to regulate a broad suite of crypto asset activities, consistent with its approach to traditional finance”.
The former head of the FCA responded to the consultation in highly critical terms, describing it as “disappointing” that the government “proceeds on the false premise that speculative crypto is a ‘financial service’”.
Charles Randell described speculative crypto as “gambling pure and simple,” adding that it “serves no social purpose” and “often impoverishes vulnerable people”. He said “if the issues and trading of speculative crypto are… treated as financial services, conferring the ‘halo’ of financial services regulation” it would “inevitably” lead to consumers losing money and the taxpayer being called on to provide compensation.
“A global hub for crypto”
Speaking to MPs on the Treasury select committee in January, Griffith said he has spent more time focussing on the crypto asset industry than any other sector and reaffirmed the government’s commitment to becoming a world-leader in crypto assets.
Griffith was asked by Labour MP Emma Hardy how worried he is about people in the UK losing “life-changing amounts of money through crypto failures or scams”.
He said: “I am worried about that, but my worry would not be if they’ve done that in a knowing environment as sentient well-informed takers of risk, that is endemic in a financial system, my worry would be if they’ve fallen victim to an unregulated financial promotion or if they’ve misunderstood the status, in terms of the UK regulatory system, the kitemark of being FCA-regulated, or their access to the financial ombudsman scheme.”
Last year, the government announced that it would allow ‘stablecoins’ - a form of cryptocurrency which is notionally linked to a real fiat currency to guarantee its value - to be used as a form of payment in the UK. Rishi Sunak said at the time it was his “ambition to make the UK a global hub for crypto asset technology”.
NationalWorld has previously reported that a Conservative donor who gave Boris Johnson £1 million last year has significant ties to the crypto sector, including an interest in Tether, one of the largest ‘stablecoins’.
The government has been engaging heavily with the crypto asset industry over the last two years, despite the high profile collapse of FTX - a cornerstone company in the sector - and an increasingly hostile approach from regulators in the US. Griffith, his predecessor as Economist Secretary to the Treasury John Glenn and even the now-Prime Minister Rishi Sunak all met with many different firms throughout 2021 and 2022.
Crypto firms that have recently lobbied the government include Gemini and Kraken - which have paid fines of $30 million each to US regulators this year.
We have previously reported meetings between ministers and Binance, the world’s largest cryptocurrency exchange, which is under investigation by the US Department of Justice, with prosecutors thought to be considering filing criminal charges or working on a settlement with the firm.
We also reported meetings between Sunak and Coinbase, which agreed to pay out $100 million (£82m) to settle a complaint from the New York State Department of Financial Services, after an investigation found that the company’s anti money laundering systems had left the exchange “vulnerable to serious criminal conduct”. The crypto firm had to pay a fine of $50 million to New York State, and invest $50 million in compliance measures.