The United Kingdom government has firmly rejected a proposal by the U.K. Treasury Committee to regulate crypto retail trading in a similar manner to gambling. The government’s response comes after a panel of British lawmakers called for crypto market regulation comparable to gambling, stating that the risks associated with crypto investment warranted the same regulatory outcome.
The Treasury Committee’s report, released on May 17, argued that crypto investment activity aligns with the principle of “same risk, same regulatory outcome.” They proposed that the crypto market should be subject to the same regulations and oversight as the gambling industry in an effort to protect consumers and prevent financial crime.
However, in a response on July 20, U.K. financial services minister Andrew Griffith firmly disagreed with the committee’s recommendation. He asserted that the HM Treasury does not support regulating retail trading and investment activity in unbacked cryptoassets as gambling, but rather as a financial service.
Currently, all forms of gambling in the U.K. are governed under the Gaming Act of 2005. This legislation applies to businesses such as bingo halls, lotteries, betting shops, online bookmakers, and casinos, with the aim of curbing compulsive gambling and enforcing anti-money laundering measures.
The government’s response highlighted concerns that adopting the committee’s approach could contradict globally agreed recommendations from international organizations and standard-setting bodies. They also warned that the committee’s recommendations may result in ambiguous and overlapping mandates between financial regulators and the Gambling Commission.
Additionally, the government emphasized that they are already working on regulatory measures for the crypto market. A proposed legislation for regulation was recently presented to parliament and discussed. The government stated that they would collaborate with the industry to ensure that crypto firms are aware of the required standards for approval.
The expected timeline for the enactment of this legislation is late 2023. The government assured that the committee’s recommendations were taken into consideration during the drafting of the legislation.
In conclusion, the United Kingdom government has firmly rejected the proposal to regulate crypto retail trading similar to gambling. They emphasized their disagreement with the Committee’s recommendation and expressed concerns about potential conflicts with existing regulatory frameworks. The government is actively working on regulatory measures for the crypto market and aims to ensure that crypto firms are aware of the standards required for approval. The proposed legislation is expected to be implemented by late 2023, with due consideration given to the committee’s recommendations.
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