Kraken, UK trade body slams lawmaker’s description of crypto as ‘gambling’

Self-regulatory organization CryptoUK and crypto exchange Kraken UK have condemned a recent report from a panel of British MPs that suggested crypto should be regulated in a similar vein to gambling.

In a May 17 report, the Treasury committee “strongly recommended” that unbacked crypto be classified as gambling due to concerns over “significant” consumer risks associated with the asset class, such as price volatility and lack of intrinsic value. should be regulated.

It finally called for crypto to be regulated under the principle ,Same risk, same regulatory consequence.

The move has not gone down well with local players, especially considering that the United Kingdom is believed to be poised to become a progressive crypto hub.

In a May 17 statement shared with Cointelegraph, CryptoUK argued that “taking this approach will not take into account the specifics of the sector and the real opportunities for inward investment and growth of the UK economy,” adding that Saying:

“No other global jurisdiction has adopted this approach and given the MiCA context in the EU, we need to adopt a tailored and harmonized approach to regulation within the industry to ensure that to ensure that the UK does not become a hostile environment for the domicile of businesses.”

The organization also suggested that such an approach could eventually lead to UK consumers seeking to engage with offshore crypto platforms, which it feels “goes completely against the objective of protecting these consumers through regulation”. is from.”

In Kraken UK’s statement, the firm stressed that it “fundamentally disagrees” with the Treasury’s “conclusion that cryptoassets have no intrinsic value.”

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“It is regrettable that the committee does not support the opportunity for the UK to become a true global leader in our fast-growing industry,” the firm said.

“The Committee’s suggestion that crypto assets should be regulated as gambling products is misguided and wholly inappropriate for UK consumers.

It argued that this not only “misses the purpose and potential of the technology”, but noted that gambling protections do not offer the same safeguards as financial services regulations.

CryptoUK pointed to the potential pitfall of capital gains tax should crypto trading be treated as gambling.

“Gambling is exempt from capital gains tax. Does the UK government want to exclude hundreds of millions of pounds of tax income from profits made from buying and selling unbacked crypto assets?” said CryptoUK.

The specific extent to which crypto will be regulated “as gambling” has not been defined by the Treasury, however, the report recommended implementing stronger regulation and guidelines related to consumer protection, money laundering and terrorism financing .

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