In a recent move, the British government has rejected the classification of crypto assets along with activities like gambling. The government’s comment comes in response to the previous proposition by the Treaury to regulate cryptocurrencies like gambling.
According to local media reports, the government of the United Kingdom, stated that it “firmly disagrees” with the U.K. Treasury Committee’s stance to regulate crypto retail trading in the same way it oversees gambling. On Thursday, responding to the committee, U.K financial services minister Andrew Griffith, rejected the proposal and said that the HM Treasury firmly disagrees with the “Committee’s recommendation to regulate retail trading and investment activity in unbacked crypto assets as gambling rather than as a financial service”.
On May 17, a panel of British lawmakers opted for regulating the UK crypto market similar to gambling in a House of Commons Committee report. Explaining the reasons, the Treasury Committee said that the crypto investment activity is consistent with the principle of “same risk, same regulatory outcome.”
It is worth noting that in the U.K. all forms of gambling are regulated under the Gaming Act of 2005. Hence, the act puts businesses like bingo halls, lotteries, betting shops, online bookmakers, and casinos under authorities’ scrutiny. The laws mark an effort to curb compulsive gambling and implement anti-money laundering measures.
In its response, the British government stated that such an approach to crypto has the potential to completely contradict the globally settled recommendations from international watchdogs, agencies and other standard-setting bodies. Further, the government opines that the committee’s recommendations can also create unclear and overlapping mandates between financial regulators and the Gambling Commission.
Notably, the Gambling Commission regulates arcades, betting, bingo, casinos, gaming machine providers, gambling software providers, lottery operators, external lottery managers and remote gambling (online and by phone) that use British-based equipment.
Additionally, the British government stated that they are already working on regulating the crypto sector and have proposed a regulatory legislation before parliament which was debated last month.
In the context of setting standards for the crypto industry and crypt firms, the government called up on the Financial Conduct Authority (FCA) and the HM Treasury duo to work on crypto regulation. As stated by the government:
HM Treasury and the FCA will work with the industry to ensure crypto firms are made fully aware of the standards required for approval at the FSMA gateway. Further communications will be provided in due course to ensure standards for approval are clearly available to crypto firms operating in the UK.
Notably, the government also assured that the much awaited crypto legislation may come into force by late 2023 while stressing that the committee’s recommendations were also taken into consideration. However, the outright rejection of classification of crypto alongside gambling marks a major positive stance of the British authorities amid their promises to promote the sector.
The current British prime-minister has intended to establish UK as the crypto hub. While there have been certain roadblocks from the regulators, authorities or other entities, the recent stance marks a major move. Overall, it also shines as hope and optimism among the increasing British investor base.