A parliamentary committee in the UK wants unbacked crypto assets to be regulated as gambling rather than financial activity.
The Treasury Committee’s latest report compelled the government to treat crypto assets like BTC and ETH as gambling instruments.
The committee highlighted the risk to retail investors from the volatility associated with crypto trading.
Lawmakers in the United Kingdom want unbacked crypto assets to be held to the same standards as gambling instruments. The House of Commons Treasury Committee published a report earlier today which compelled the government to regulate crypto trading and related investments as gambling.
Crypto Including BTC & ETH To Be Regulated As Gambling
According to the 28-page report that was put together by lawmakers from multiple parties, mainstream crypto assets like Bitcoin and Ethereum should be regulated as gambling. The lawmakers argued that the potential use of such cryptocurrencies by fraudsters and money launderers poses a significant risk to consumers and the economy. The report compelled the UK government to recognize and regulate unbacked cryptocurrencies as gambling instruments.
With no intrinsic value, huge price volatility and no discernible social good, consumer trading of cryptocurrencies like bitcoin more closely resembles gambling than a financial service, and should be regulated as such.”
Harriett Baldwin, member of Parliament and Chair of the Treasury Committee
The lawmakers behind the report argued that the volatility associated with the trading of unbacked crypto assets categorized it as sports betting rather than investing. To that end, the government has been recommended to not consider crypto trading a financial activity. The report comes amid the government’s plans to develop comprehensive regulations for the crypto industry. The lawmakers have warned that regulating retail crypto trading will create a “halo effect”, prompting retail investors to perceive crypto trading as safer than it is.
The Treasury Committee’s report took into account the events that transpired in the crypto industry in 2022. The string of bankruptcies and scandals cost crypto investors billions of pounds and highlighted the risks associated with crypto assets. However, the report acknowledged that crypto’s underlying blockchain technology may be of use to the country’s financial sector.