The U.K. government rejected lawmaker plans to regulate crypto like gambling, saying its existing proposals better address the risks posed by events such as the FTX collapse, in a document published Thursday.
In May, the House of Commons’ Treasury Committee expressed concern that government plans to apply rules broadly similar to those for traditional finance to crypto treats the sector too softly, creating a halo effect that makes people think investing in bitcoin (BTC) or ether (ETH) is safe.
“The Government firmly disagrees with the Committee’s recommendation” concerning retail crypto trading and investment, the Treasury response said.
“A system of gambling regulation, in isolation, would be unlikely to address these risk factors” such as the commingling of customer funds alleged of crypto exchange FTX, or correct problems linked to insider trading and market manipulation that are covered by traditional financial regulation, the government added.
“The recommendation to rely on gambling regulation would represent a fundamental departure from the Government’s intended approach which reflects recommendations from global standard-setting bodies,” the government said, citing recommendations from the Financial Stability Board recently endorsed by finance ministers from the world’s 20 leading economies, and warning that divergence would merely push crypto offshore.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.