Campaigners and Members of Parliament are calling for British Ministers and regulatory bodies to adopt a stricter approach on the promotion of crypto assets in the UK, highlighting some similarities to gambling and its possible negative consequences, especially for young people.
Currently, Ministers are considering whether to impose a regulatory crackdown on new digital investment opportunities, including cryptocurrencies and non-fungible tokens (NFTs) later this year. They have taken into account the increasing warnings that such operations could be dangerous to young people, who are usually considered more vulnerable to negative impacts.
Crypto and NFT products, including digital artworks and so-called “fan tokens” have been heavily promoted by individual football players, football clubs and online influencers. For the time being, they remain very lightly regulated in the UK, although experts have highlighted the similarities between them and gambling games and speculative investments, both of which are currently subject to strict regulation by the local authorities. Furthermore, no agency is directly responsible for regulating crypto assets, with the Advertising Standards Authority (ASA) being proactive in putting abusive practices in the sector to an end.
Now, both Members of Parliament and campaigners are calling for the Government to take further action in the next few months, including by including crypto in the ongoing comprehensive gambling review. Reportedly, the Financial Conduct Authority (FCA) is willing to be granted additional powers to investigate the industry. It is currently able only to regulate crypto assets in case there is a danger of violation of counter-terrorist financing and anti-money laundering legislation.
Campaigners and MPs Fear British Customers Could Lose a Lot of Money on Crypto and NFTs
For the time being, dozens of smaller cryptocurrencies exist along with well-known larger ones such as Bitcoin and Ether. Although they are rarely used for making payments, investors who are speculating with their value over time usually purchase them.
On the other hand, so-called non-fungible tokens (NFTs) use the same blockchain technology as cryptocurrencies in order to prove individual ownership of various items. A couple of months ago, it was revealed that experts had been worried that football fans could have lost money by investing in NFTs, which are being advertised by popular and much-loved athletes and football clubs.
The ASA recently criticised Arsenal F.C. for promoting fan tokens, which are one of the ways for supporters to gain a stake in the football club. However, the aforementioned fan tokens provide the club’s supporters with few actual benefits, not to mention the fact that their value has been declining. The Advertising Standards Authority highlighted the fact that crypto assets have become extremely popular over the last few years, but this did not mean there was no real danger for people to be pushed into investing all of their money based on poor understanding, which very much resembles gambling.
According to some MPs, there has been a grey area between highly-leveraged financial investments, on one hand, and the aforementioned products that could absolutely reasonably be considered gambling, on the other hand. That is why there has to be a clear differentiation between the two services so that Brits are better protected against possible harm associated with the practice.
Currently, the UK Treasury is preparing its response to consultation regarding the industry regulation, with a spokesperson for the agency confirming that it taking action to protect customers as a result of the development of certain crypto assets.
- Author
Daniel Williams
