The UK Government has rejected a proposal tabled by the Treasury Committee at the House of Commons to regulate crypto retail trading in the same way gambling is currently overseen. At the time when it denied the proposal, the Government highlighted that it strongly disagrees with the position shared by the Committee.
In mid-May, a number of British lawmakers urged the Government to regulate the UK cryptocurrency market like gambling. At the time, the Treasury Committee issued a report saying that crypto investment activity pretty much poses the same risk and leads to the same regulatory outcome.
Yesterday, Andrew Griffith, the UK Economic Secretary to the Treasury, responded to the Committee, rejecting its proposal. He said that the Treasury strongly disagrees with the recommendation of the Committee to regulate crypto assets-related retail trading and investment activity as gambling rather than a financial service.
For the time being, all forms of gambling in the UK are regulated under the provisions of the country’s Gambling Act 2005. Businesses, including betting outlets, bingo halls, lotteries, online casinos and bookmakers, are required to make sure they have adequate measures aimed at tackling problem gambling and gambling-related harm. They are also expected to implement Anti-Money Laundering measures.
UKGC and FCA Regulation Should Not Overlap, Lawmakers Say
In its response to the House of Commons’ Treasury Committee, the UK Government noted that a regulatory approach that recognises the differences between gambling and cryptocurrency could potentially fully counter the globally agreed recommendations for global organisations and standard-setting bodies.
According to the British Government, the recommendations of the Committee have the potential to create overlapping or unclear mandates between the country’s gambling and financial regulatory bodies, which would make the oversight of the two sectors significantly harder. Furthermore, the lawmakers added that they are already making efforts to regulate the cryptocurrency market, and proposed regulatory legislation was tabled to Parliament and debated in June.
The Government issued a statement saying that the Financial Conduct Authority (FCA) and HM Treasury would work with the industry to make sure that crypto companies are made fully aware of the standards required for approval at the Financial Services and Markets Act (FSMA) gateway. The lawmakers further noted that more communications would follow in due course to make sure that standards for approval are clearly available to cryptocurrency companies operating in the UK.
The UK Government also noted that the aforementioned piece of legislation may come into force by the end of 2023. It further explained that the recommendations of the Treasury Committee were taken into account in the process of consideration.
As mentioned above, last month, local lawmakers passed a bill that officially recognised cryptocurrency as regulated financial activity. As part of the move, the country is also focused on setting strict rules regarding the advertising of crypto services, and potential penalties following a lack of compliance with cryptocurrency laws.
- Author
Daniel Williams
