Tribunal dismisses cryptocurrency regulation appeal

In a recent decision by the United Kingdom First-tier Tribunal (General Regulatory Chamber), the appeal brought by George Greenwood against the Information Commissioner regarding two decision notices was dismissed. The case revolved around Greenwood's request for information related to HM Treasury's (HMT) discussions with Binance about cryptographic currency, blockchain technologies, and digital assets, submitted under the Freedom of Information Act 2000 (FOIA). The decisions under review dated from October 2023, highlighting the ongoing tension between public interest, government transparency, and confidential commercial interests.

The appeal was formally lodged following the Information Commissioner’s findings which upheld HMT’s discretion to withhold requested documents based on two primary exemptions within FOIA: the need to maintain a "safe space" for policy development and the potential for disclosing information to prejudice commercial interests. Greenwood's requests included documentation of meetings and correspondence between HMT and Binance focused on the burgeoning cryptoassets sector.

The tribunal conducted a meticulous examination of the appeals, asserting that the Commissioner had acted within his rights when concluding that the need for confidentiality outweighed public interest in transparency. The complexity of the issues at hand—particularly concerning the legislative framework surrounding digital currencies—underscored the challenges regulators face in balancing innovation with consumer protection and market integrity.

HMT argued that the nature of their interactions with Binance included confidential discussions integral to the formulation of policy, which could be jeopardised by disclosure. They maintained that indices from such discussions could influence stakeholder engagements and deter valuable dialogues necessary for effective policy-making. The tribunal recognised the importance of maintaining a secure environment where candid discussions could occur without fear of repercussions that public scrutiny might provoke.

In deliberations, the tribunal highlighted that information related to the formulation of government policy is generally exempt from disclosure under FOIA unless there is a compelling public interest in favour of transparency that outweighs the need for confidentiality. The fact that HMT was undergoing an active consultation at the time of the requests strengthened their position, particularly as the discussions around cryptoasset regulations were still ongoing.

The tribunal also turned its attention to section 43(2) of FOIA, which shields information if its release could harm commercial interests. HMT contended that revealing certain details could afford adverse advantages to competitors in the highly volatile crypto market. The tribunal found HMT's concerns credible, suggesting that their fear of creating a significant competitive disadvantage was reasonable and plausible, hence validating the application of this exemption.

Throughout the hearings, tribunal members questioned Greenwood's assertions, noting that while transparency is vital in government operations, so too is ensuring that entities participating in policy discussions can do so freely. The tribunal concluded that providing a safe environment for such interactions serves a broader public interest than merely revealing their contents.

In conclusion, the tribunal upheld the Information Commissioner's rulings, asserting that the balance of public interest lies in favour of confidentiality in this instance. While the calls for transparency in governmental dealings with significant financial entities like Binance are understandable, the tribunal believed that the exemptions under FOIA were appropriately applied given the context. In a sector characterised by rapid innovation and evolving regulations, the tribunal expressed that preserving the integrity of the policy development process takes precedence over immediate transparency in the interest of ongoing regulatory efficacy.

The dismissal of Greenwood's appeals reinforces the challenges faced by public bodies in navigating the complex interplay between the need for open government and the essential confidentiality required for effective policy formulation and commercial security.

Judge Brian Kennedy KC presided over the decision, issued on 28 March 2025.