Lords watchdog investigating Labour peer who wrote to Treasury on behalf of crypto firm | House of Lords

The former Labour party general secretary Iain McNicol is under investigation by the House of Lords standards watchdog after he wrote to the Treasury on behalf of a cryptocurrency company that was paying him.

The Lords commissioners for standards said they had launched an inquiry into Lord McNicol over potential breaches of the code of conduct, citing a clause that states members “must not seek to profit from membership of the house by accepting or agreeing to accept payment or other incentive or reward in return for providing parliamentary advice or services”.

The inquiry is the third to be launched by the standards commissioners after revelations in the Lords debate, a months-long investigation by the Guardian into the commercial interests of members of parliament’s second chamber.

McNicol, who has previously served on Keir Starmer’s frontbench, wrote to the Treasury as an adviser to a Dubai- and Zurich-based company called Astra Protocol, a tech startup that launched a cryptocurrency token that has plunged in value by 99.7% since its peak.

His role at the company 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, the Labour peer wrote that the company 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 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”.

He referred to Astra Protocol’s “unique offering” and “expertise” on cryptocurrency, and signed the letter as “Lord Iain McNicol of West Kilbride – adviser, 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, had raised questions over whether McNicol’s approach to Treasury officials fell foul of Lords rules that prohibit peers from providing parliamentary services to organisations that are paying them. 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.”

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.

Other peers to be placed under investigation by the commissioners as a result of the Guardian investigation include Lord Evans of Watford, who is facing cash-for-access questions. Undercover filming revealed he had offered access to ministers during discussions about a commercial deal worth tens of thousands of pounds. He was recorded explaining to undercover reporters how to approach Angela Rayner, the deputy prime minister and housing secretary. Evans has denied any wrongdoing and has not received any payments.

A third peer, Richard Dannatt, was secretly filmed telling undercover reporters he could make introductions within the government and that he would “make a point of getting to know” the best-placed minister, in spite of rules prohibiting peers from lobbying. Lord Dannatt has denied breaking the rules of the upper chamber, saying: “I am well aware of … the Lords code of conduct … I have always acted on my personal honour.”

The commissioner is also investigating Michelle Mone for a number of different potential breaches over her alleged involvement in procuring contracts for PPE Medpro. The inquiry into Lady Mone was prompted by a separate Guardian investigation.

McNicol has been contacted for comment on the investigation.