• CryptoUK, a UK trade body and Kraken, a crypto exchange, have criticized a report from the House of Commons Treasury Committee that suggests crypto should be regulated as gambling.
• CryptoUK argues that regulating it this way would not take into account the nuances of the sector and could lead to consumers looking for offshore platforms.
• Kraken believes the committee’s suggestion is misguided and does not support the UK opportunity to be a global leader in the industry.
Kraken, CryptoUK Deride Lawmaker Description of Crypto as ‘Gambling’
Self-regulatory organization CryptoUK and crypto exchange Kraken have slammed a recent report from a panel of British lawmakers that suggested crypto should be regulated in a similar vein to gambling. In response, both entities argued that such an approach will not take into account the nuances of the sector and could lead to UK consumers looking for offshore platforms instead.
The House of Commons Treasury Committee Report
In its May 17 report, The House of Commons Treasury Committee “strongly recommended” that unbacked cryptocurrency be regulated as gambling due to concerns over consumer risks associated with the asset class such as price volatility and lack of intrinsic value. It called for crypto to be regulated under the principle of “same risk, same regulatory outcome.”
CryptoUK argued in its May 17 statement that taking this approach will not only fail to consider all nuances but also lead to UK consumers looking for offshore platforms instead. The organization suggested that such an approach may ultimately make it difficult for businesses to be domiciled in the United Kingdom if it is seen as hostile towards cryptocurrency regulation.
Kraken fundamentally disagreed with The Treasury’s conclusion that cryptocurrencies have no intrinsic value in its statement. The firm argued that by suggesting crypto assets should be regulated as gambling products was misguided and unsuitable for UK consumers since it did not support opportunities for growth within the industry nor protect consumers through regulation effectively.
Overall, both entities believe there needs to be more nuance when considering how cryptocurrencies should be regulated within Britain given how much potential they have within financial markets worldwide. A tailored approach must be taken while keeping consumer protection at its forefront if these entities are going to get on board with any form of regulation proposed by British lawmakers concerning digital assets such as Bitcoin (BTC) or Ethereum (ETH).