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Crypto advocacy group criticizes UK Treasury Committee recommendation to regulate crypto like gambling Crypto advocacy group criticizes UK Treasury Committee recommendation to regulate crypto like gambling

Crypto advocacy group criticizes UK Treasury Committee recommendation to regulate crypto like gambling

CryptoUK said the U.K. Treasury Select Committee failed to "reflect the true nature, purpose and potential of the crypto industry,"

Crypto advocacy group criticizes UK Treasury Committee recommendation to regulate crypto like gambling

Cover art/illustration via CryptoSlate

A crypto advocacy group has criticized the U.K. Parliament Treasury Select Committee’s recommendation to regulate cryptocurrency trading as gambling.

Treasury Select Committee lampoons crypto

In a report published on May 17, the Committee urged the government to stop wasting taxpayers’ funds on innovations such as virtual assets until it shows their benefits.

The Committee compared cryptocurrency investing and trading to gambling in terms of its potential to be addictive. According to the report, trading cryptocurrencies is similar to “betting on unbacked tokens,” adding that traders should know they can lose all their money.

“Regardless of the regulatory regime, [crypto] price volatility and absence of intrinsic value means that unbacked cryptoassets will inevitably pose significant risks to consumers. Furthermore, consumer speculation in unbacked cryptoassets more closely resembles gambling than it does a financial service.

We are concerned that regulating retail trading and investment activity in unbacked cryptoassets as a financial service will create a โ€˜haloโ€™ effect that leads consumers to believe that this activity is safer than it is, or protected when it is not.”

The report also criticized the recent attempt by the government to create a non-fungible token (NFT) through the Royal Mint. According to the Committee, the government shouldn’t promote particular technological innovations for their own sake.

Meanwhile, the U.K. government had to scrap the NFT plan due to a lack of demand.

However, the Treasury Committee conceded that blockchain technology could benefit the financial services industry. The Committee said:

“The most convincing use case we have heard is the potential for cryptoasset technologies to improve the efficiency and reduce the cost of making payments, especially cross-border and in lower-income countries with less developed financial sectors. An effective regulatory framework would support the development of such technologies in the UK while also mitigating some of the risks cryptoassets pose.”

Advocacy group disagree

A pro-crypto advocacy group, CryptoUK, has published a statement disagreeing with the Committee’s conclusion, saying they are “unhelpful, false, fundamentally flawed and unsubstantiated.”

CryptoUK said the Treasury Select Committee statement failed to “reflect the true nature, purpose and potential of the crypto industry,” the association added.

Ian Taylor, Board Advisor at CryptoUK, asked if the government was willing to overlook the “tens of millions of pounds in tax income from gains made by the buying and selling of unbacked crypto assets?”