The UK Government does not agree that Cryptocurrency is a form of Gambling

The UK government has taken a decisive stance against proposals to categorize cryptocurrency trading as gambling, emphasizing the need for a regulatory framework.

The Parliamentary Committee’s Recommendation

A recent inquiry conducted by a committee of UK lawmakers prompted a recommendation that consumer trading in cryptocurrencies should be treated as a form of gambling.

This committee, known as the Treasury Committee, argued that cryptocurrencies like Bitcoin lacked intrinsic value and served no significant societal purpose while being associated with criminal activities such as scams, fraud, and money laundering.

Government’s Firm Disagreement

In response to the Treasury Committee’s recommendation, the UK Treasury expressed a “firm disagreement.” They argued that regulating retail trading and investment in unbacked crypto assets as gambling, rather than as a financial service, was not aligned with global regulatory norms and standards.

The Global Perspective

Andrew Griffith, the Financial Secretary to the Treasury, highlighted that classifying crypto trading as gambling would contradict international recommendations and guidelines established by global organizations and standard-setting bodies. Such a classification, according to Griffith, would also fail to address critical risks associated with the crypto industry.

Regulatory Framework for Crypto Assets

The UK government firmly believes that a financial services regulatory framework is better suited to address the risks posed by unbacked crypto assets while fostering a conducive environment for safe innovation. This framework would encompass robust measures to mitigate consumer risks, including the dissemination of misinformation.

Action Against Misinformation

The UK government is actively taking steps to combat misinformation within the cryptocurrency industry. One notable initiative is the introduction of a dedicated financial promotions regulatory regime for crypto assets.

Legislation related to this regime was recently presented before Parliament, underwent debate, and is expected to be in force by late 2023.

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