UK rejects proposal to regulate crypto like gambling
- In May, the Treasury Committee proposed that the government regulate cryptocurrency like gambling.
- The government has responded that such an approach could go contrary to the globally agreed crypto recommendations.
The United Kingdom has refused to accept the Treasury Committee’s proposal to regulate crypto retail trading like gambling.
In May, the Treasury Committee of the House of Commons expressed concern that the government intended to impose crypto laws that are broadly similar to those for traditional finance (TradFi). It leads people to believe that investing in Bitcoin [BTC] or Ethereum [ETH] is risk-free.
According to the Treasury Committee, cryptocurrency investment activity is consistent with the premise of “same risk, same regulatory outcome.”
The Committee proposed that the government should regulate cryptocurrency as a kind of gambling.
On 19 July UK financial services minister Andrew Griffith responded to the Treasury Committee that the finance ministry “firmly disagrees” with its recent recommendations to classify retail trading and investment in crypto assets similar to gambling.
Instead, the ministry intends to regulate the crypto economy in the same way that it does conventional financial services. Regulating crypto like gambling will not address risk considerations, as evidenced by the November 2022 collapse of crypto exchange FTX [FTT].
In the UK, the Gaming Act of 2005 governs all types of gaming. Bingo halls, lotteries, betting shops, internet bookmakers, and casinos are being investigated in an effort to reduce compulsive gambling and adopt anti-money laundering measures.
Government to bring crypto regulation law
The government’s response noted that such an approach has the potential to completely counter the globally agreed recommendations from international organizations. The government believes the committee’s recommendations can potentially create unclear and overlapping mandates between financial regulators and the Gambling Commission.
The government also stated that it was already working on regulating the cryptocurrency industry. A proposed regulation law was presented and debated in parliament last month.
The government also stated that this law might go into effect by late 2023. It also underlined that the government has taken the Treasury Committee’s suggestions into account.