UK Government Rejects Proposal to Regulate Crypto Trading Like Gambling

The United Kingdom government has firmly rejected a proposal from the House of Commons Treasury Committee to regulate crypto retail trading in a manner similar to the oversight of gambling activities. The government emphasizes its disagreement with the committee's stance and is already taking steps to regulate the crypto market independently.

Lawmakers' Call for Crypto Market Regulation

On May 17, a panel of British lawmakers, known as the Treasury Committee, advocated for regulating the UK crypto market on par with gambling regulations. According to their report, they believe that crypto investment activity should be subject to the same regulatory outcome as gambling, based on the principle of "same risk, same regulatory outcome."

UK Economic Secretary's Response

In response to the committee's proposal, UK Economic Secretary to the Treasury, Andrew Griffith, issued a statement on July 20, firmly dismissing the idea. The treasury does not support the recommendation to treat retail trading and investment in unbacked cryptoassets as gambling instead of financial services.

The Gambling Act 2005

Currently, all forms of gambling in the UK are governed by the Gambling Act 2005. This legislation monitors various businesses, including bingo halls, lotteries, betting shops, online bookmakers, and casinos, with the aim of curbing compulsive gambling and implementing Anti-Money Laundering measures.

Global Impact of the Proposed Regulation

The government highlights that the committee's approach could potentially contradict globally agreed recommendations from international organizations and standard-setting bodies. The UK government fears that adopting the committee's suggestions might lead to unclear and overlapping mandates between financial regulators and the Gambling Commission.

Government's Ongoing Efforts in Crypto Market Regulation

The UK government asserts that it is already diligently working on regulating the crypto market. Last month, proposed legislation for the industry was presented before parliament and thoroughly debated. The government intends to establish proper standards for the crypto industry and related firms. To achieve this, they plan to collaborate with the Financial Conduct Authority (FCA) to ensure that crypto firms understand and adhere to the standards required for approval at the FSMA (Financial Services and Markets Act) gateway. Further communications will be provided to crypto firms in the UK to make these standards clearly available.

Looking Ahead

The government anticipates that this regulatory legislation may come into force by late 2023. While the committee's recommendations were taken into consideration, they ultimately did not align with the government's vision for regulating the crypto market.

In conclusion, the UK government firmly rejects the idea of regulating crypto retail trading as gambling. Instead, they are committed to developing a distinct and comprehensive regulatory framework for the crypto market, working closely with industry stakeholders and financial regulators to establish clear standards for the approval of crypto firms operating in the UK. By doing so, they aim to strike a balance between fostering a secure environment for investors and businesses while ensuring compliance with global best practices.



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