UK Lawmakers Call for Cryptocurrencies to be Regulated as Gambling

UK Lawmakers Call for Cryptocurrencies to be Regulated as Gambling.

A panel of UK lawmakers has recommended that cryptocurrencies, including Bitcoin and Ether, be regulated as gambling due to concerns about fraud and consumer risks.

In a report released on Wednesday, the parliament’s treasury committee argued that cryptoassets should be subject to regulations similar to those imposed on gambling activities, rather than being treated as financial services as they currently are.

The report highlighted the fact that Bitcoin and Ether, which account for a significant portion of the cryptocurrency market, are not backed by any currency or asset, making their prices highly volatile and posing a potential risk of total loss for investors.

The lawmakers expressed concerns that if retail trading and investment in unbacked cryptocurrencies are not regulated appropriately, it could create a false perception of safety and protection for consumers.

The Financial Conduct Authority (FCA) has previously cautioned investors about the risks associated with cryptocurrencies, emphasizing the possibility of losing all invested funds. However, the collapse of the FTX exchange last year has heightened the urgency to establish regulatory measures for the crypto industry.

The treasury committee’s chair, Harriett Baldwin, stated that the events of 2022 highlighted the risks posed by the crypto asset industry, which is still largely unregulated and resembles a “wild west” environment. Official figures indicate that approximately 10% of UK adults have held or currently hold crypto assets.

While acknowledging the potential for cryptocurrency technology to enhance payment efficiency, the report called for stronger regulation to protect consumers. The European Union recently approved comprehensive rules for crypto markets, and international regulators are expected to propose global norms in the near future.

The UK government is currently in the process of formulating its first regulations for crypto assets, with a focus on anti-money laundering measures. The treasury committee’s recommendation to categorize cryptocurrencies as gambling reflects a call for tighter oversight and safeguards to address the potential risks associated with these digital assets.