The United Kingdom government has firmly disagreed with a proposal put forward by the House of Commons Treasury Committee. The committee had suggested that the regulation of crypto retail trading should be akin to the oversight of gambling activities.
Panel’s Call for Similar Regulation and Government’s Rejection
Back in May 17, a panel of British lawmakers, the Treasury Committee, released a report. They were advocating for the regulation of the UK crypto market to be treated on par with gambling. The crux of their argument was that crypto investment activities carry similar risks and, therefore, should receive the same level of regulatory scrutiny.
However, on July 20, the UK Economic Secretary to the Treasury, Andrew Griffith, dismissed the committee’s proposal outright. The government firmly rejected the idea of classifying retail trading and investment in unbacked cryptoassets as gambling, instead of categorizing them under financial services.
Gambling Regulation in the UK and Global Implications
Notably, the UK has a robust framework for regulating gambling activities, governed by the Gaming Act of 2005. This legislation encompasses various businesses, including bingo halls, lotteries, betting shops, online bookmakers, and casinos. The purpose of this regulation is to address issues like compulsive gambling and money laundering prevention.
Furthermore, the government’s response highlighted that the suggested approach could conflict with internationally agreed recommendations from reputable organizations. Additionally, there is a concern that adopting the committee’s recommendations might create ambiguity and overlap between the responsibilities of financial regulators and the Gambling Commission.
Ongoing Regulatory Efforts and Projected Timeline
The government further emphasized that it is already actively working on regulating the crypto market. A proposed regulatory legislation was recently presented to parliament and discussed. The aim is to establish clear standards for the crypto industry and cryptocurrency firms.
To achieve the desired outcomes, HM Treasury and the Financial Conduct Authority (FCA) plan to collaborate closely with the crypto industry. The goal is to ensure that crypto firms operating in the UK are well-informed about the approval standards required at the Financial Services and Markets Act (FSMA) gateway.
The government also provided an estimated timeline for the legislation’s implementation. They expect the proposed regulations to take effect by late 2023. Importantly, the government acknowledged that it had taken the committee’s recommendations into consideration during this process.