The UK government has dismissed the idea of regulating the cryptocurrency sector like gambling.
UK financial services minister Andrew Griffith told parliament’s Treasury Committee on Thursday that the finance ministry “firmly disagrees” with its recent recommendations to regulate retail trading and investment activity in crypto assets as gambling, Reuters first reported. The ministry wants to oversee the crypto industry in the same manner as other financial services, rather than positioning the country at odds with global regulators.
Regulating crypto like gambling would not address risk factors as demonstrated by the collapse of crypto exchange FTX last year, Griffith added.
The UK Treasury Committee made its recommendations in a May report which stated crypto assets like bitcoin and ether "have no intrinsic value and serve no useful social purpose" and should be regulated by the government as gambling instruments.
Responding to the report, crypto trading firms, in a tongue-in-cheek way, questioned whether such a move would protect their profits from capital gains tax."From a tax perspective: happy days for anyone invested in crypto because it is completely exempt from a tax perspective," Nimesh Shah, chief executive of tax and accounting advisory Blick Rothenberg said in May.
The dismissal follows plans announced last month by UK Prime Minister Rishi Sunak to make the country a web3 hub. Sunak is keen on providing regulatory clarity regarding how crypto businesses should register and operate in the UK. "We must embrace new innovations like web3, powered by blockchain technology, which will enable start-ups to flourish here and grow the economy," Sunak's office said in a statement at the time.
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