Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Crypto trading should be treated like a type of gambling, influential MPs say

Crypto trading should be treated like a type of gambling, influential MPs say

The Treasury Committee made the recommendation while describing digital currencies as having "no intrinsic value and no useful social purpose".
An influential panel of MPs has called on the government to regulate consumer crypto trading and speculation as a type of gambling.

The cross-party Treasury Committee claimed digital currencies such as Bitcoin and Ether have "no intrinsic value and no useful social purpose" - and as well as consuming large amounts of energy, they are often used by criminals for scams.

It comes after the government announced proposals in February to regulate the crypto industry by bringing it under financial services law.

But MPs said a better approach would be to recognise how speculation in unbacked cryptoassets - like Bitcoin - "more closely resembles gambling than a financial service".

It recommended that safeguarding rules which oversee the likes of lotteries, betting firms and casinos should apply instead.

Around 10% of UK adults have speculated in cryptoassets, according to HM Revenue and Customs.

The committee's new report warned digital currencies are a "significant risk" due to "huge" price volatility, with the potential for customers to lose everything they invest.

It said there was evidence that addictions to cryptocurrency speculation were on the rise - and warned there are limited controls currently in place to protect vulnerable consumers.

MPs said they were concerned that bringing the industry under financial service regulation "will create a 'halo' effect that leads consumers to believe that this activity is safer than it is, or protected when it is not".

"We therefore strongly recommend that the government regulates retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service, consistent with its stated principle of 'same risk, same regulatory outcome,'" the report added.

A 'Wild West' industry

It comes after a 2018 report by the committee described the cryptocurrency industry as a "Wild West" - with MPs saying nothing in their subsequent enquiries had moved them to alter that verdict.

Following the new report, committee chair, Conservative MP Harriett Baldwin, said: "Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the UK's financial services industry.

"However, with no intrinsic value, huge price volatility and no discernible social good, consumer trading of cryptocurrencies like Bitcoin more closely resembles gambling than a financial service, and should be regulated as such."

The MPs said they still felt there was potential in the technology - such as by improving the efficiency and costs of making payments - and advised the government to take a "balanced approach" in supporting innovation.

The committee added it was separately considering the potential role of digital currencies backed by central banks.

Meanwhile its report also criticised the government's attempt in April 2022 to launch a non-fungible token (NFT) - a type of cryptocurrency asset - through the Royal Mint. The plan was dropped earlier this year following a review.

MPs said the government "should seek to avoid expending public resources on supporting cryptoasset activities without a clear, beneficial use case".

Crypto 'offers opportunities'

It comes as the government considers responses to a consultation into its regulation proposals.

A Treasury spokesperson indicated ministers would likely reject the committee's recommendation.

They told Sky News: "Risks posed by crypto are typical of those that exist in traditional financial services and it's financial services regulation - rather than gambling regulation - that has the track record in mitigating them.

"Crypto offers opportunities but we are taking an agile approach to robustly regulating the market, addressing the most pressing risks first in a way that promotes innovation."

The report comes amid growing pressure on governments around the world to better regulate the industry, heightened by the sudden bankruptcy of crypto platform FTX in November.

Some 80,000 UK-based customers were impacted by the collapse, and one British investor was left with a £1m hole in his finances.

The European Union this week approved tougher cryptoasset rules - including new powers to ban exchanges that fail to protect consumers.

The International Organisation of Securities Commissions (IOSCO), whose members include regulators in the US and UK, said it will also soon announce proposals for the first ever set of global rules covering crypto trading.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Historic Papal Conclave Set to Commence in Rome
“Trump Supporter” Aims to Bring a MAGA-Style Shift to Romania
Common Sense Returns to Britain's Legal System: UK Supreme Court Declares a Woman Is… a Woman
EU Hits TikTok with €530 Million Fine Over China Data Transfers
Beijing Says U.S. Is ‘Reaching Out’ for Tariff Talks Amid Soaring Trade Tensions
Warren Buffett to Step Down as Berkshire CEO After Nearly 60 Years
Trump Shares AI-Generated Image of Himself as… Pope, Prompting Outrage Reaction
Germany's Alternative für Deutschland (AfD) party has now been officially labeled “right-wing extremist” by the federal office for the so-called “protection of the constitution.”
Amazon Launches Satellite Internet Service Amidst Competition with SpaceX
Transformative Changes in Women's Wrestling: The Rise of WWE Superstars
The Rush to the White Gold: Global Investment Surge in Natural Hydrogen Exploration
This is a day in Spain without electricity and internet
Trump Administration Removes National Security Adviser Mike Waltz Amid Signal Chat Controversy
U.S. Economy Shrink in Trump’s First Quarter as Tariff Policy Raises Questions
U.S. and Ukraine Poised to Sign Strategic Critical Minerals Deal Amid Geopolitical Shifts
Spain Restores Power After Unprecedented Nationwide Blackout
Liverpool Clinches Record-Equalling 20th English League Title Under Arne Slot
How do you fix this culture?
Corrupted from Within: How Deep State Power and Unelected Judges Hijacked Democracy Against the Will of the People
President Trump and Ukrainian President Zelensky just held an impromptu discussion on the sidelines of Pope Francis' funeral in Rome.
World Leaders Gather in Rome for Pope Francis's Funeral
Pope Francis Laid to Rest in Rome as World Leaders Attend Funeral
Not Child’s Play: How Competitive Gaming Became a Global Economic Empire
California Surpasses Japan to Become the World’s Fourth-Largest Economy
Peter Navarro: The Man Behind Trump’s Tariff Madness
Former U.S. Congressman George Santos sentenced to eighty-seven months for wide-ranging fraud
Pope Francis: head of the Catholic church who pushed for social and economic justice
China do not pay these tariffs - you pay it. This is new 145% tax you pay to the US government.
Cultural Battles in the Vatican: The Candidates in the Battle for the Holy See and Pope Francis's Testament
Global Leaders Pay Tribute to Pope Francis Following His Death
Wild Chimpanzees Observed Bonding Over Alcoholic Fruit
Greek Christians Celebrate Easter in Thessaloníki
US Federal Reserve Chair Issues Warning on Tariff Impact
China, China, China!
Pope Francis Makes Brief Appearance at Easter Sunday Mass
Saudi Arabia Offers Max Verstappen Unprecedented Deal to Join Aston Martin
Global Pistachio Shortage Amid Rising Demand for 'Dubai Chocolate'
Trump is assembling a coalition of Western leaders aligned with the MAGA vision, strengthening a unified front for global change
IMF Predicts No Global Recession Amid Trade Tensions
Alphabet Faces Antitrust Setbacks as Federal Judges Rule Against Google
US Billionaires Call for Higher Taxes, but Proposed 'Millionaires Tax' May Not Achieve Desired Outcome
This is Vienna, Austria in 2025.
Designed in US, made in China: Why Apple is stuck in tariff tussle
Boeing Jet Returns to US from China Amid Tariff War
US Sets Deadline for Russia-Ukraine Peace Deal Brokerage
Italy Introduces 'Sex Rooms' in Prisons for Inmates
Italian Prime Minister Giorgia Meloni Meets with Donald Trump to Discuss EU-US Trade Tensions
South East Asia Caught in US-China Trade Dispute
Ukraine and US Sign Outline of Minerals Deal
U.S. and Panama Finalize Defense Agreements Amid Canal Access and Chinese Influence Concerns
×