In a recently published report, the Treasury Select Committee “strongly recommended” retail crypto trading to be treated akin to gambling. The cross-party group of Parliament members argued that trading is more similar to betting on sports or in a casino rather than investing.
In fact, the report specified that top crypto assets like Bitcoin and Ethereum also “have no intrinsic value and serve no useful social purpose.” Harriett Baldwin, who chairs the committee, additionally brought to light the “huge price volatility” factor and underlined how that makes crypto assets fundamentally different from traditional financial assets. As a result, lawmakers contended that the government regulates crypto as a gambling instrument. The report noted,
“We therefore strongly recommend that the Government regulates retail trading and investment activity in unbacked crypto assets as gambling rather than as a financial service, consistent with its stated principle of ‘same risk, same regulatory outcome’.”
Also Read: U.K. To Soon Adopt “Robust” Cryptocurrency Regulations?
Earlier, the FCA recently revealed that the UK planned to regulate crypto under a “tough” new financial services law. As Watcher Guru reported, statements from the regulator claimed tougher standards were needed to “detoxify” crypto to protect consumers. FCA Chair, Ashley Alder, also highlighted how the new crypto law will need to mimic the toughness of the traditional finance industry.
Also Read: UK Plans to Regulate Crypto Under “Tough” New Financial Services Law
The ‘wild west’ connotation
Citing data from HM Revenue & Customs, the report brought to light that around 10% of UK adults hold or have held crypto assets. Conventionally, the government ought to respond to the report within “about two months of publication,” according to Bloomberg. However, it is not mandatory to follow the recommendations. Baldwin went on to underline how the events of 2022 have “highlighted the risks posed to consumers by the crypto asset industry. The Chair noted that “large parts” of the same “remains a wild west.” Chalking out other red flags, the report noted,
“We are concerned that regulating retail trading and investment activity in unbacked crypto assets as a financial service will create a ‘halo’ effect that leads consumers to believe that this activity is safer than it is, or protected when it is not.”
Also Read: UK’s FCA to ‘Disrupt’ Illegal Cryptocurrency ATMs