Self-regulatory organization CryptoUK and cryptocurrency exchange Kraken have criticized a recent report by a group of British lawmakers suggesting that cryptocurrencies should be regulated in a similar way to gambling.
In a May 17 report, the House of Commons Treasury Committee “strongly recommended” that unbacked cryptocurrencies be regulated as gambling due to concerns about the “significant” consumer risks associated with this class. of assets, such as price volatility and lack of intrinsic value.
Ultimately, he called for cryptocurrencies to be regulated under the principle of “same risksame regulatory result.”
The move has not gone down well with local users, especially considering that the UK is believed to be on its way to becoming a progressive center for cryptocurrencies.
In a May 17 statement shared with Cointelegraph, CryptoUK argued that “taking this approach will fail to take into account the nuances of the sector and the real opportunities for inward investment and growth in the UK economy as a whole,” adding that :
“No other global jurisdiction has taken this approach, and referencing MiCA in the EU, we need to take a tailored and tailored approach to regulation within the industry to ensure the UK does not become a hostile environment for companies are domiciled”.
The organization also suggested that such an approach may ultimately lead to consumers in the UK looking abroad for cryptocurrency platforms to engage with, which in their opinion is “completely contrary to the objective of protecting these consumers through of regulation”.
In Kraken’s statement, the firm stressed that it “fundamentally” disagrees with Treasury’s “conclusion that crypto assets have no intrinsic value.”
“It is regrettable that the commission does not support the opportunity for the UK to be a true global leader in our rapidly developing industry,” the company said, adding:
“The committee’s suggestion that crypto assets should be regulated as gambling products is misguided and totally inappropriate for UK consumers.”
He argued that it not only “misses the purpose and potential of the technology,” but said that gambling protections do not offer the same safeguards as financial services regulations.
CryptoUK pointed to the potential loss of capital gains tax should cryptocurrency trading become regulated as gambling:
“Gambling is exempt from capital gains tax. Does the UK government want to exclude tens of millions of pounds in tax revenue from the profits made from buying and selling unbacked crypto assets?”
Of course not, but it’s so incredibly silly that this is the result of a consultation that was VERY well attended by written evidence from people involved
— Laurence (@functi0nZer0) May 17, 2023
The Treasury has not defined the extent to which cryptocurrencies would be regulated “like gambling”; however, the report recommended imposing strong regulation and guidelines regarding consumer protection, the fight against money laundering and terrorist financing.
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