Today, legislators in the United Kingdom Parliament considered subjecting cryptocurrencies including Bitcoin to gambling regulations. In a parliamentary report, the lawmakers cited the growing financial risks enveloped in the assets as the reason for the consideration. They insisted that digital assets, particularly cryptocurrencies pose huge risks to its investors.
In the report conveyed by the lawmakers, it was asserted that Bitcoin and Ethereum constitute two-thirds of all cryptocurrencies in the market. They alleged that these assets lack the backing of any tangible assets or currency. This, as revealed makes it a greater risk for investors. The report reflected on the extreme volatility of these crypto assets which, as claimed, usually condemn investors to losses. Occasioned by this prevalence, the lawmakers opposed retail regulation of these assets, saying it gives investors a false hope of security and makes them believe the activities in the crypto market are safer, reliable and that they are well protected.
The lawmakers however proposed that the government must begin to regulate retail trading and investment in cryptocurrencies as gambling, and not as a financial offering. Now, this proposal by the U.K. parliamentarians has since its release been greeted with numerous reactions. One of the reactors, identified as CryptoUK slammed the lawmakers for such a proposal. The industry organization said the details of the report conveyed the by the parliament is not only incorrect but fundamentally flawed. CryptoUK added that the report contains unproven assertions that do not reflect the true nature of the crypto market.
Ongoing regulatory scrutiny of cryptocurrencies
Recall that the collapse of FTX has triggered regulators across the globe to tighten their scrutiny on the crypto sphere. In the United Kingdom, govenment wants to initiate several regulations to meet the emerging situations in the industry. Likewise, the country seeks to emerge as one of the leading hub for cryptocurrencies and blockchain. At the moment, the only notable regulation relating to crypto in the country is anti-money laundering law.
However, this proposal by the U.K. lawmakers comes barely a day after the European Council adopted MiCa. According to findings, MiCa constitutes the first detailed and clear body of regulations for cryptocurrencies within Europe. Before the adoption by the council, member states and the European Parliament have already approved MiCA. The regulatory framework ensures that crypto firms seek approval from the European Union before operating within its jurisdiction. It also seeks to compel these firms to abide by regulations geared towards preventing terrorism financing and money laundering across Europe.