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British Government Disagrees With Lawmakers’ Call
The British Finance Ministry has thwarted the idea of classing crypto trading as gambling.
Andrew Griffith, U.K. Economic Secretary to the Treasury, told parliament’s Treasury Committee on July 20 that the finance ministry “firmly disagrees” with its recent recommendations to regulate retail trading and investment activity in cryptocurrencies as gambling.
The law change was presented in May 2023 by a panel of British lawmakers. In its proposal, the committee argued that crypto assets had “no intrinsic value” and warned against regulating them as financial assets, as it could create a “halo effect” that tricks consumers into thinking that investing in cryptocurrencies like Bitcoin and Ether is safe.
According to Griffith, such an approach would put the country at odds with globally agreed standards and could push crypto asset activity overseas. Additionally, regulating crypto like gambling would not address some risks, such as market manipulation or unacceptable disclosures associated with trading them.
Regulating Crypto As A Financial Service
The government response noted that it is already working on regulating the crypto market, and proposed legislation was introduced to parliament and debated in June.
The statement from the U.K. government further indicated that regulating crypto as financial assets is more suitable for addressing the risks of unbacked cryptocurrencies and creating the conditions necessary for safe innovation.
The rejection comes after the Chancellor of the Exchequer, Rishi Sunak; last month announced plans to make the country a global Web3 hub. Sunak is intent on providing regulatory clarity concerning how crypto-focused businesses should register and operate within the UK. “We must embrace new innovations like web3, powered by blockchain technology, which will enable start-ups to flourish here and grow the economy,” Sunak posited at the time.