The Finance Committee of the British Parliament recently took a firm stance, suggesting that cryptocurrencies should be regulated similarly to gambling. In their published report, the committee emphasized the risks associated with cryptocurrencies for ordinary users, prompting the need for regulation. While the UK previously only had anti-money laundering measures in place for cryptocurrencies, it is now preparing its initial set of rules specifically targeting virtual coins.
The report explicitly mentions popular cryptocurrencies such as bitcoin and ethereum, which together constitute two-thirds of all crypto assets. Notably, these cryptocurrencies lack backing from any specific currency or assets, leading to significant price fluctuations and increased risks of investment loss.
The committee’s final report strongly recommends that the government regulate trading and investment activities involving unbacked cryptoassets under gambling regulations rather than considering them as financial services. Furthermore, the report emphasizes that such restrictions should also apply to retail trades.
The report also cautions that any regulations should be well-planned and effectively communicated to the public to avoid creating a false impression of complete safety for regulated cryptocurrencies. The UK’s Financial Conduct Authority has consistently warned consumers about the potential risk of losing all their invested funds in cryptocurrencies.
CryptoUK, representing the UK crypto sector, strongly opposes the report, stating that cryptoassets should not be equated with gambling. According to their statement, the claims made by the Finance Committee are unhelpful, untrue, unsubstantiated, and fundamentally flawed, as they fail to capture the true nature, purpose, and potential of the crypto-industry.
Meanwhile, the EU Council, representing member states of the European Union, has recently approved regulations for cryptocurrency markets, which currently stand as the strictest international standards for trading virtual assets. These new regulations mandate intermediaries to collect buyer and seller data to combat money laundering and circumvention of EU sanctions. The aim is to enhance security and transparency in the cryptocurrency market.
Although the global market value of cryptoassets stands at approximately $1.2 trillion (equivalent to around CZK 26 trillion), representing a relatively small share of the financial system, last year’s collapse of cryptocurrency exchange FTX highlighted the necessity for industry regulation, as reported by Reuters.