Both CryptoUK, a self-regulatory organization representing the UK crypto industry, and Kraken, a crypto exchange, have criticized a recent report from a panel of British lawmakers that proposed regulating cryptocurrencies like gambling.
The House of Commons Treasury Committee recommended treating unbacked crypto as gambling due to concerns about consumer risks, such as price volatility and perceived lack of intrinsic value. The report called for applying the principle of “same risk, same regulatory outcome” to crypto regulation.
They argue that labeling crypto as gambling would be an inaccurate characterization that fails to recognize its potential as an innovative financial technology. They believe that the UK should adopt a progressive approach to crypto regulation, positioning itself as a leading crypto hub.
The cryptocurrency industry in the UK is striving for appropriate regulation that addresses consumer protection while fostering innovation and responsible growth. CryptoUK and Kraken emphasize the need for a balanced regulatory framework that promotes transparency, security, and market integrity, without stifling the development of the crypto sector.
The debate around crypto regulation in the UK is ongoing, with stakeholders advocating for a comprehensive understanding of cryptocurrencies and their potential benefits. The outcome of these discussions will likely shape the regulatory landscape for cryptocurrencies in the country and could have broader implications for the global crypto industry.
In Kraken’s statement, the firm emphasized that it “fundamentally” disagrees with the Treasury’s “conclusion that cryptoassets have no intrinsic value.”
CryptoUK pointed to a potential loss of capital gains tax should crypto trading be regarded as gambling:
“Gambling is exempt from capital gains tax. Does the U.K. government wish to exclude tens of millions of pounds in tax income from gains made by the buying and selling of unbacked crypto assets?”