UK government rejects plans to regulate crypto as gambling

The UK government has rejected a proposal to regulate crypto like gambling, and says that existing proposals better address risks associated with events such as the collapse of FTX.

According to Britain’s Financial Services Minister Andrew Griffith, treating crypto assets as a form of gambling would put the UK at odds with global and European Union regulators and fail to mitigate risks from the sector.

In May, Parliament’s Treasury Select Committee had submitted a report that cryptocurrencies like Bitcoin, Ethereum, and other ’unbacked’ crypto should be regulated as gambling, given the significant risks that they posed to consumers.

The finance ministry published its response today, stating that it ‘firmly disagrees with the recommendation from the Treasury Select Committee. Instead, the finance ministry favours regulating cryptocurrencies as financial services.

Griffith’s report also states that ‘a system of gambling regulation could also fail to appropriately mitigate many of the critical risks… including those associated with market manipulation, inadequate prudential arrangements, and deficiencies in core financial risk management practices.