A committee of British lawmakers has recommended regulating crypto trading as gambling. Viewing retail trading of cryptocurrencies as more akin to gambling rather than a financial service, the U.K. Treasury Committee stated that “Cryptocurrencies such as bitcoin have no intrinsic value and serve no useful social purpose, while consuming large amounts of energy and being used by criminals in scams, fraud, and money laundering.”
UK Lawmakers Propose Regulating Crypto Like Gambling
The U.K. Parliament announced Wednesday that the Treasury Committee has called for “consumer trading in unbacked crypto to be regulated as gambling.” The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of HM Treasury, HM Revenue and Customs, and associated public bodies. Eleven members of parliament (MPs) currently serve as members of the Committee.
Citing a report titled “Regulating Crypto” which the Treasury Committee published on Wednesday, the Parliament explained: “The cross-party Committee of MPs highlights that cryptocurrencies such as bitcoin have no intrinsic value and serve no useful social purpose, while consuming large amounts of energy and being used by criminals in scams, fraud and money laundering.” The announcement further details:
The Committee concludes that cryptocurrencies pose significant risks to consumers, given their price volatility and the risk of losses. Given retail trading in unbacked crypto more closely resembles gambling than a financial service, the MPs call on the government to regulate it as such.
The chair of the Treasury Committee, Parliament Member Harriett Baldwin, commented: “The events of 2022 have highlighted the risks posed to consumers by the cryptoasset industry, large parts of which remain a wild west. Effective regulation is clearly needed … By betting on these unbacked ‘tokens’, consumers should be aware that all their money could be lost.”
In addition, the U.K. Parliament noted:
The Committee is also concerned that regulating consumer crypto trading as a financial service – as proposed by the government – will create a ‘halo’ effect, leading consumers to believe this activity is safe and protected, when it is not.
The U.K. is currently working on legislation to regulate the crypto sector as it strives to become a “global hub” for crypto assets. In February, the British government published a proposed regulatory framework for crypto. Andrew Griffith, Economic Secretary to the U.K. Treasury, told CNBC in April that specific crypto regulation could come into force within a year or so.
What do you think about the Treasury Committee’s proposal to regulate crypto trading as gambling? Let us know in the comments section below.