A cryptocurrency firm that employs the former chancellor Philip Hammond as an adviser has withdrawn its application to operate in the UK, after struggling to win approval from the financial regulator.

The Guardian revealed earlier this year that Copper Technologies, in which Hammond holds a 0.5% stake, was considering seeking registration in Switzerland rather than the UK.

The company had been given temporary registration by the Financial Conduct Authority (FCA), pending approval of the controls it had put in place to prevent money laundering and terrorist financing.

Fintech company Revolut, which had also been placed on the FCAs temporary list, was awarded full registration for its UK crypto business last month.

But Copper Technologies has revealed, in accounts filed at Companies House, that it had withdrawn its application and moved UK customers to Switzerland, after winning approval there.

Hammond, who was chancellor between July 2016 and July 2019, has been critical of the UK for failing to set up a comprehensive regulatory framework governing cryptocurrencies.

Earlier this year he said it was frankly quite shocking that Britain was lagging behind other countries.

The FCAs regime for digital assets currently covers money laundering and terrorist financing but not specific aspects of cryptocurrency trading and investing.

Hammond, recruited by Copper Technologies as a senior adviser in 2021, has growth shares that were thought to be worth up to $15m (13m), based on reports by Bloomberg that the company was seeking a valuation of $3bn in a fundraising exercise.

The accounts show that Copper Technologies has raised $196m so far but the ultimate success of the fundraising and thus the valuation could be affected by a broad global sell-off of digital assets over the past year.

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In the meantime, losses at Copper, which provides digital currency infrastructure to other businesses, have increased from 3.6m to 14.3m, accounts show.

A spokesperson for the company said: Copper maintains open and active dialogue with regulators across the jurisdictions where we are operating, including of course with the FCA. Since gaining our membership to [Swiss body] VQF in May, we are pleased to be able to offer clients services from Switzerland.

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Cryptocurrency firm advised by Philip Hammond withdraws UK application - The Guardian