According to the government, the proposal by a lawmaker in the country to regulate crypto as a form of gambling would mean that – although crypto would have been dealt a reputational blow – the regulators themselves would be at a loss on how to address cases such as the collapse of FTX.
Crypto Cannot Be Regulated as Gambling
In other words, the UK government does not see a realistic way for gambling regulators to cover the crypto industry and do so in a tenable manner that protects consumers from potential harm. Meanwhile, however, the idea of regulating cryptocurrencies as a form of traditional finance would make people believe that investing in Bitcoin or Ether is as safe as buying stock, a House of Commons committee suggested earlier this week.
The Treasury has said that a system of gambling regulation would not be able to properly assess risk factors in the crypto industry, or correct problems that have to do with insider trading or market manipulation that are covered by mainstream financial regulation.
“The recommendation to rely on gambling regulation would represent a fundamental departure from the Government’s intended approach which reflects recommendations from global standard-setting bodies,” the government added and said that many financial experts agreed with this assessment.
The UK is still hard-pressed to come up with a unified front on crypto regulation such as it is. The country is even lagging behind the European Union, the club of countries it boisterously left several years back, beleaguering the country with new-found problems and admittedly -behind other jurisdictions in regulating crypto.
Rishi Sunak, the current Prime Minister, promised to transform the United Kingdom into a hub for the cryptocurrency industry, but those efforts have been slow going.