UK folds on plan to regulate crypto like gambling
The original gambling proposal came in May, and the Treasury said it ran “completely counter to globally agreed recommendations”
Andrew Angelov/Shutterstock modified by Blockworks
The British government has rejected a proposal to regulate crypto trading and investing as if it were gambling.
Economic Secretary to the HM Treasury Andrew Griffith has “firmly” disagreed with the UK Parliament’s Treasury Committee’s idea to police “retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service.”
In the May report, the Committee considered bitcoin (BTC) and ether (ETH) “unbacked cryptoassets” that have “no intrinsic value” and serve “no useful social purpose.”
Griffith argued that rendering crypto trading synonymous with gambling, instead of bringing it under a “financial services regulatory framework,” would oppose established recommendations from “international organizations and standard-setting bodies.”
One such body mentioned was the UK Financial Stability Board, which published a set of nine guidelines for regulating crypto in October 2022. Nowhere in the 77-page document does the FSB suggest bringing crypto asset activity under the umbrella of the Gambling Commission as the Committee had requested.
Griffith also said that the gambling rules approach could fail to mitigate “critical risks” to consumers such as “market manipulation, inadequate prudential arrangements, and deficiencies in core financial risk management practices.”
The UK government published a consultation paper in February 2023 in its first major foray into crypto regulation, professing a desire to work with digital asset firms “to develop a regulatory framework.”
More recently, the UK’s Financial Conduct Authority has mulled plans to rein in crypto memes.
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