Trump's Meme-Coin Stunt Risks Derailing UK's Crypto Ambitions

Sensible crypto bosses fear that the Trump meme coins risk falling in value, burning first-time asset investors and damaging the reputation of the sector.

Interest in crypto has surged globally, thanks largely to Donald Trump, who has not only promised to embrace the sector but has also launched his own-brand “meme coins” with his wife, Melania.

However, some crypto bosses fear that the Trump meme coins could fall in value, burning first-time asset investors and damaging the reputation of the sector. One chief executive even accused him of “making a mockery of the industry”. But few doubt that the president will follow through on his promise of turning the US into the “crypto capital of the planet”.

Gary Gensler, the crypto-sceptic chair of US financial regulator the Securities and Exchange Commission, is out. And Trump has ordered new crypto regulations, which the sector believes will build credibility for their assets among investors and companies.

This is good news for the industry as a whole. But, among advocates of Britain’s crypto sector, there is a feeling of opportunity missed.

Many felt that during the Biden years, when crypto was treated with much caution and some disdain in America, the UK had the chance to establish itself as the sector’s global centre by passing legislation to regulate, legitimise and support it.

Trump appears to have brought an end to that dream.

Graham Rodford, the chief executive of London-based crypto exchange Archax, said: “I would say we were ahead of the US and we no longer are. And if you’re an investor, or somebody setting up a company, I think at the moment you’d be looking at the US and saying, ‘You know what, it’s a more open market for innovation and it’s got a supportive president in place.’ ”

A spokesperson for CryptoUK, a trade body, said: “For the UK, there’s a risk that the country slips behind on the world stage and the aspiration of becoming a global crypto hub dampens.”

On Friday, venture capital firm Andreessen Horowitz announced it would be closing its London office less than two years after it expanded into the UK, targeting crypto investments. Anthony Albanese, a managing director at the firm, said: “We have chosen to focus on the US given the new administration’s strong policy momentum.”

The rise of crypto can be traced back to November 2008, when an anonymous internet user known as Satoshi Nakamoto published an online research paper that set out plans for a form of digital money known as bitcoin.

At the height of the financial crisis, trust in banks and governments was low, and Nakamoto wanted the new currency to be kept away from such institutions.

One of the challenges of launching a “decentralised” digital currency such as this was ensuring that units of money (ultimately made up of code) could not be copied. Nakamoto’s solution was “blockchain”, a digital ledger that kept track of all transactions to ensure duplication of coins could not take place.

Bitcoin took off in the early 2010s and an industry began to take shape. New digital currencies and blockchains were created, brokers entered the sector to manage investments, and crypto trading exchanges were formed. Some firms even started opening bitcoin ATMs, where speculators could swap physical cash for the digital currency. One such machine opened in a coffee bar in Hoxton, east London, in early 2014 — shortly after they had started rolling out in parts of Canada and the US.

As one of the world’s financial centres, the UK served as a launchpad for several entrepreneurs.

Blockchain.com, originally a website for tracking bitcoin transactions that later launched a popular digital wallet in which users could store their cryptocurrencies, was founded in the two-bedroom York flat of Ben Reeves, a coder and early bitcoin enthusiast. The Cayman Islands-domiciled company, no longer led by Reeves, today claims to have 37 million users across the world and was recently valued at $7 billion (£5.5 billion) in a private fundraising.

Another British member of crypto royalty is Lancaster-born computer scientist Gavin Wood, who co-founded the ethereum cryptocurrency and later created the Polkadot blockchain platform, which is valued at $9.6 billion based on the current price of its currency, DOT.

And Mustafa Al-Bassam, an Iraqi-British tech entrepreneur, is a co-founder and chief executive of the Celestia Foundation, a blockchain technology business that recently raised $100 million in an investment round led by Bain Capital Crypto.

Al-Bassam, who says Celestia has a current valuation of about $5 billion, lives in London but his company is headquartered in Liechtenstein. Why not the UK? “If you’re launching a token, or you’re doing a blockchain, there are several reasons why you can’t base your headquarters in the UK,” he said, explaining that there is “no clear regulation” for parts of the sector and that UK-based banks are generally hesitant to