- The UK government has rejected calls to regulate the cryptocurrency sector as gambling and instead aims to oversee it under financial services regulations.
- Andrew Griffith, the UK financial services minister, strongly disagrees with the proposal to treat retail trading and investment in crypto assets as gambling.
- The government’s approach focuses on promoting safe innovation with effective risk management.
The UK government has recently dismissed calls to regulate the cryptocurrency sector as gambling, opting instead for oversight through financial services regulations. The UK financial services minister Andrew Griffith expressed his stance before the parliament’s Treasury Committee. He strongly disagrees with the comparison between crypto and gambling.
During the committee hearing, Griffith argued that regulating crypto as gambling would not effectively address the risk factors prevalent in the cryptocurrency industry. He cited the example of the collapse of the crypto exchange FTX last year.
It highlights that a gambling regulatory framework would not have been sufficient to prevent such events. Griffith emphasized the need for a robust regulatory approach that adequately addresses the complexities and risks associated with the crypto market.
The UK finance ministry’s stance aligns with HM Treasury’s recognition of the risks posed to consumers in the crypto space. However, the government believes applying a financial services regulatory framework is more suitable for addressing these risks. This approach seeks to strike a balance between promoting innovation and ensuring consumer protection.
The committee recommending the regulation of crypto as gambling raised concerns about potential misalignment with international standards. They also highlighted the potential confusion and inefficiencies that could arise from overlapping responsibilities between financial regulators and the Gambling Commission.
The UK government’s decision to reject the gambling regulatory approach for cryptocurrencies reflects its commitment to safeguarding consumers. Also, the government seeks to strike a balance between fostering innovation and effectively managing risks in the rapidly evolving crypto landscape.