In a remarkable dialogue, the UK government has respectfully declined a zealously debated proposal by the U.K. Treasury Committee to exercise authority over crypto retail trading in a manner likened to the policing of gambling. The lawmakers convey their argument with the principle of “same risk, same regulatory outcome,” implying that the potential hazards of crypto investments are vastly similar to those of gambling. However, the UK government has something else in mind.
Against the compelling backdrop of this controversy, the UK’s financial services minister, Andrew Griffith, responded by declaring that the HM Treasury stands in stark disagreement with the notion of branding retail trading and investment activity in unbacked crypto-assets akin to gambling than viewing it as a financial service. By bringing into light the Gaming Act of 2005, Griffith highlights the extensive scrutiny business entities such as bingo halls, lotteries, betting shops, online bookmakers, and casinos undergo to prevent compulsive gambling and instill anti-money laundering measures.
At the heart of this stands the governmental view that such an approach can potentially contradict globally agreed recommendations from international bodies and standard-setting organizations. This could lead to ambiguous and overlapping mandates between financial regulators and the Gambling Commission. The government sagely points out that it has already begun the journey towards regulating the crypto market and has even proposed regulatory legislation for parliamentary discussion.
While one might question the stand taken by the government, it becomes apparent that their aim is to ensure high standards for the crypto industry and crypto firms. In their planning, the HM Treasury and the FCA diligently intend to work with the crypto industry. The primary purpose is to guarantee that crypto firms are made thoroughly aware of the approval standards that they need to meet at the FSMA gateway.
Further on, plans are afoot to put in place a communication strategy to make these approval standards explicitly available to crypto firms functioning in the UK. With a target date of late 2023, the UK government also emphasizes that they have duly taken into consideration the committee’s recommendations in their forthcoming legislation.
Therefore, in an age where digital currencies are gaining momentum, the UK government appears to be paving a unique regulatory path for crypto that distinguishes it from conventional forms of trade such as gambling. This divergence of views sparks an inherent, unaddressed query – should the risk factors of the crypto market and gambling, which are arguably similar, determine the regulatory framework, or should the nature of the activity under consideration guide the regulatory dictates? Is this a matter of gambling or an innovative financial service? Only time will reveal the ultimate outcome of this intriguing regulatory narrative.
Source: Cointelegraph
