Sunak's crypto charm offensive brought to an end as Truss named UK prime minister

The election of Liz Truss as the UK's new prime minister on Monday has further clouded the outlook for the country's crypto policy.

The new Conservative leader, who was voted in by party members to replace Boris Johnson in the nation's top job, has not so far laid out a cohesive position on digital assets. Rishi Sunak, her defeated opponent, was seen as friendly to the industry.

Truss, who served in government under three different prime ministers, has held posts as secretary of state for foreign, Commonwealth and development affairs since 2021 and as minister for women and equalities since 2019.

In 2018, she tweeted that the UK should "welcome cryptocurrencies in a way that doesn't constrain their potential. Liberate free enterprise areas by removing regulations that restrict prosperity."

Since then, however she has not laid out specific crypto policies or regulatory intentions for the sector. It is rumored she is set to tap Kwasi Kwarteng for the top Treasury job who, as business minister, fast tracked laws to tackle "dirty money" being moved around by foreign oligarchs. 

Meanwhile, defeated leadership challenger Sunak was more overtly crypto curious when he served as chancellor for the exchequer between February 2020 and July 2022. In April this year, he set out plans to make the UK a crypto friendly tech hub, and said the Royal Mint would launch an NFT this summer. He also made moves for stablecoins to be brought within regulation, paving their way for use in the UK as a recognized form of payment.

The move came amid a protracted period of confusion around crypto regulation in the UK, as firms waited for verdicts from the financial regulator on anti-money laundering licensing. The process, conducted through the Financial Conduct Authority (FCA), forced many to consider their place in the UK market, including crypto market maker B2C2, Blockchain.com, and wallet firm Wirex, which have all chosen to seek licenses elsewhere. 

These policies also followed meetings with top crypto executives and venture capital firms. 

The Treasury ministers' meetings log, published on the UK government website, shows Sunak met with Sequoia managing partner Douglas Leone to "discuss the UK’s Venture Capital sector" earlier this year. Previous disclosures also showed that at the end of last year, Sunak visited California and met with representatives from Sequoia and Andreessen Horowitz, as well as attending a roundtable with companies including Bitwise, Celo, Solana and Iqoniq. 

It is thought unlikely that Sunak will be given a place in Truss's cabinet.