UK Government Refuse to Class Cryptocurrencies as Gambling

The UK Treasury that regulates financial matters in the country has rejected proposals from a committee of parliamentarians to regulate cryptocurrencies as gambling.

In response to the proposal from MPs the Treasury said, “firmly disagrees” with the recommendation to regulate “retail trading and investment activity in un-backed crypto assets as gambling rather than as a financial service”.

Back in May the committee recommended that trading in cryptocurrencies should be considered gambling and regulated as such as the currency has what the committee say “has no intrinsic value and serve no useful social purpose, while consuming large amounts of energy and are used by criminals in scams, fraud and money laundering.”

Harriett Baldwin MP and Chair of the Treasury Committee said, “Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the UK’s financial services industry.”

In response the government said that by classing it as gambling was “out of kilter with regulations elsewhere in the world.”

Andrew Griffith, Financial Secretary to the Treasury, said such a move “would run completely counter to globally agreed recommendations from international organisations and standard-setting bodies.”

He went on to say, “that a system of gambling regulation could also fail to appropriately mitigate many of the critical risks that were discussed in HM Treasury’s recent consultation on crypto asset regulation, including those associated with market manipulation, inadequate prudential arrangements, and deficiencies in core financial risk management practices.”

“A financial services regulatory framework is more appropriate for addressing the risks of unbacked crypto assets and creating the conditions for safe innovation. This can – and will – come with a set of robust measures to mitigate consumer risks mentioned in the Committee’s report, including the risks of consumers getting misinformed,” concluded Griffith.