The government added that it is already working on regulating the crypto market, and proposed legislation was put before parliament and debated last month.
The United Kingdom government has rejected a proposal made by the House of Commons Treasury Committee to regulate crypto retail trading in the same way it oversees gambling, highlighting that it “firmly disagrees” with the committee’s stance.
A panel of British lawmakers called for regulating the U.K. crypto market similar to gambling in a May 17 committee report. The Treasury Committee said that crypto investment activity is consistent with the principle of “same risk, same regulatory outcome.”
In a July 20 response to the committee, U.K. Economic Secretary to the Treasury Andrew Griffith rejected the proposal and said that the treasury firmly disagrees with the “Committee’s recommendation to regulate retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service.”
In the U.K., all forms of gambling are governed under the Gambling Act 2005. Businesses, including bingo halls, lotteries, betting shops, online bookmakers and casinos, are under scrutiny to curb compulsive gambling and implement Anti-Money Laundering measures.
The government response noted that such an approach has the potential to completely counter the globally agreed recommendations from international organizations and standard-setting bodies. The British government believes the committee’s recommendations can potentially create unclear and overlapping mandates between financial regulators and the Gambling Commission.
The government added that it is already working on regulating the crypto market, and proposed regulatory legislation was put before parliament and debated last month. Talking about setting standards for the crypto industry and crypt firms, the government stated:
“HM Treasury and the FCA [Financial Conduct Authority] will work with the industry to ensure crypto firms are made fully aware of the standards required for approval at the FSMA gateway. Further communications will be provided in due course to ensure standards for approval are clearly available to crypto firms operating in the UK.“
The government also said that this legislation may come into force by late 2023 and that the committee’s recommendations were also considered.