• The United Kingdom believes that investing in cryptocurrency is similar to gambling and should be regulated as such.
• U.K. authorities believe that like gambling, investing in crypto can be quite addictive and necessary rules must be put in place to protect people from themselves.
• A special committee under the Treasury has released a report claiming that crypto and blockchain are part of financial innovations that cannot – and should not – be governed under the Financial Conduct Authority (FCA).
The United Kingdom Sees Crypto Investing as Gambling
The United Kingdom sees investing in cryptocurrency as similar to gambling, and leaders are suggesting that crypto be regulated in the same way the U.K. oversees gambling activities. To an extent, one can argue that investing in crypto is sort of a gamble because whenever you buy bitcoin, Ethereum, or some other digital asset, you’re taking a chance that it could go down or up with no way of knowing where it will be. Thus, U.K. authorities believe that like gambling, investing in crypto can be quite addictive, and thus traders won’t always know when to stop necessitating regulations to protect people from themselves.
Suggestions for Regulations
Conservative MP and Treasury committee chair Harriett Baldwin explained: “Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the U.K’s financial services industry.“ She further suggested that consumer trading of cryptocurrencies like bitcoin resembles more closely resemble gambling than a financial service and should thus be regulated accordingly so users are aware all their money could potentially lost when betting on „unbacked ‚tokens.'“
Opposition to Regulations
Not everyone is happy about what’s going on however – A special committee under the Treasury has released a report claiming that crypto and blockchain are part of financial innovations that cannot – and should not – be governed under the Financial Conduct Authority (FCA), which is where crypto regulation would occur in the U.K..
Right now nothing is set in stone but these proposed rules may eventually influence future crypto regulations both within the United Kingdom and possibly even within Europe due to its MiCA regulations recently passed by European Union (EU).
Whether these new regulations pass or not remains uncertain but if they do it will bring new challenges for those involved with cryptocurrency investments within UK jurisdiction who may have been previously unaware of such risks associated with them before now