A group of U.K. lawmakers proposed that cryptocurrencies such as Bitcoin and Ether should be subject to gambling regulations due to the significant financial risks they present to consumers, in a report released on Wednesday.
See related article: UK lawmakers vote to regulate digital assets as financial instruments
Fast facts
- According to the parliamentary treasury committee report, Bitcoin and Ether comprise two-thirds of all cryptocurrencies. They aren’t backed by tangible assets or currency, introducing price volatility and risks total loss for those who invest in them.
- The lawmakers said that regulating retail trade and investment in these digital currencies could potentially give consumers a false sense of security, misleading them into believing that these activities are safer and more protected than they are.
- The report added that the government should treat retail trading and cryptocurrency investment as gambling rather than a financial service.
- As part of its vision to become a leading global center for cryptocurrencies and the blockchain technology that underpins them, the U.K. is formulating its inaugural regulations for these digital assets. Currently, the only regulatory obligations cryptocurrencies meet are those related to anti-money laundering.
- In response to the lawmakers’ proposal, CryptoUK, an industry body, said in a statement that the claims made in the report are not only incorrect but also fundamentally flawed, unproven, and fail to truly represent the nature, potential, and purpose of the crypto industry.
See related article: If the UK wants to become a crypto hub, it must do better