A Labour peer who served on Keir Starmer’s frontbench wrote to the Treasury on behalf of a cryptocurrency firm that was paying him as an adviser, raising questions about whether this was within the rules.
Iain McNicol, 55, advised the Dubai- and Zurich-based Astra Protocol, a tech startup that launched a cryptocurrency token, which has plunged in value by 99.7% since its peak.
His role at the firm was announced in January 2023, and he wrote to the Treasury in June that year offering its views on regulation as a submission to a consultation that had closed two months earlier. A consultation is a process of inviting views on an issue to help inform government decision-making.
In his letter, Lord McNicol, a former general secretary of the Labour party, wrote that the firm had assembled an “esteemed team of industry veterans and high-profile political advisers, with extensive experience in crypto”. He told the Treasury consultation that Astra Protocol’s team meant it was “uniquely placed to provide meaningful insights into the challenges and opportunities that come with regulating DeFi [decentralised finance] and other crypto assets”. He cautioned in the letter against allowing regulation to “stifle innovation”.
In a covering email, he acknowledged that the deadline for the consultation had passed, saying: “This is a long shot and if not considered as a submission then, hopefully, helpful background information for you.” The peer added: “If you do wish to follow up we would be more than happy to go into further detail.”
He referred to Astra Protocol’s “unique offering” and “expertise” on cryptocurrency, and signed the letter as “Lord Iain McNicol of West Kilbride – Advisor, Astra Protocol”. The email and letter from McNicol to the Treasury were released under Freedom of Information laws.
Tom Brake, the director of Unlock Democracy and a former deputy leader of the House of Commons, said there were questions over whether McNicol’s approach to Treasury officials fell foul of House of Lords rules that prohibit peers from providing parliamentary services to organisations that are paying them. Peers are allowed to take on paid roles and must list them on a public register, but unlike MPs they do not have to declare how much they earn unless working for a foreign state.
The House of Lords rules at the time stated: “The prohibition on accepting payment in return for parliamentary services means that members may not, in return for payment or other incentive or reward, assist outside organisations or persons in influencing members of either house, ministers or officials.
“This includes seeking by means of participation in proceedings of the house to confer exclusive benefit upon the organisation or person, or making use of their position to lobby, or to help others to lobby, members of either house, ministers or officials, by whatever means.”
Brake said: “Urgent clarification is needed from the House of Lords commissioners on whether this action was within the rules. If it is deemed in order, then there is a very strong case that the Guardian has identified a loophole which needs to be promptly plugged.”
Astra Protocol, whose advisory board includes the former EU commissioner Phil Hogan and a former chief of staff to Donald Trump’s White House, Mick Mulvaney, marketed itself as a fintech startup aiming to develop tools to help crypto firms with regulatory compliance. However, by July 2023 the company’s $ASTRA token had lost 99.7% of its value.
By October 2023, McNicol had joined Starmer’s frontbench in the House of Lords, a role he held until the general election in July last year. McNicol told the Guardian he had given up his paid consultancy role at Astra Protocol in September 2023, but had kept the entry on his Lords register of interests since then because he was offering occasional strategic advice to the firm. It is still listed under the category of “remunerated employment”.
McNicol’s spokesperson said: “Lord McNicol responded openly to a public consultation in 2023 and made clear on his social media and in the written submission to the consultation that he did so in his capacity as a strategic adviser to Astra Protocol. The response was emailed to public enquiries at the Treasury and was one of over 130 to the public consultation. At no point in the process did he meet with or speak to any minister or civil servant.
“Lord McNicol’s external strategic advice to Astra focused on the importance of anti money laundering (AML) and know your customer (KYC) technology. His paid advisory work for Astra ceased at the end of September 2023.”
In May last year, while a member of Starmer’s frontbench team, McNicol gave a speech at the British Blockchain Association about Labour’s plans for the fintech sector, during which he mentioned his role advising the firm, by then known as Astra Enterprise, describing it as developing anti-money-laundering technology.
McNicol made his speech as an avatar addressing a conference in a futuristic virtual reality setting, according to a video still on YouTube.
“Labour is keen to prevent the UK slipping behind in a fast-moving industry such as this,” he told the virtual audience. “And with such strong competition globally that’s going to be very easy to do. We want fintech businesses to stay and to choose to locate themselves here.”
His speech is likely to raise questions about why a then shadow minister spoke across both his private interests and Labour policy.
McNicol was also until then an adviser to a communications and lobbying outfit, Stonehaven, and to another business, Kekst CNC, until December. Stonehaven decided to part company with peers after an outcry about its decision to make Charlotte Vere, a former transport minister, a partner.
According to McNicol’s register of interests he is still an adviser to Astra Enterprise, which rebranded from Astra Protocol last year, with two of its original founders still apparently part of the management.
According to its social media, the original Astra Protocol company now appears entirely separate under a new Astra branding, with a new chief executive. It released a statement in October 2024 saying it was under new management and would honour its commitments to those who had bought cryptocurrency tokens.
McNicol is a former trade unionist and was general secretary of the Labour party from 2011 to 2018, during the Ed Miliband and Jeremy Corbyn years. Before that, he was national political officer at the GMB union.
Since entering the Lords, his declarations on the register of interests show he has acquired a portfolio of roles in financial services. Since 2019 he has chaired the oversight board of a “for-profit social enterprise” money lender called Salad Projects, ending in January this year, and in 2023 he was retained to act as a strategic adviser to the Investing and Saving Alliance, an industry group.
He also has a consulting firm, McNicol Consulting, whose only client appears to be the International Republican Institute, described as a “non-profit, non-partisan organisation working to support and strengthen democratic institutions”. Its board is mostly drawn from members of the US Republican party.