The crypto industry is facing a new challenge in the UK, as some MPs call for gambling-style regulations. The MPs argue that crypto assets are highly volatile and risky and that consumers need more protection and transparency when investing in them.
According to a report by the All-Party Parliamentary Group on Digital Currencies, the UK should adopt a “precautionary principle” and regulate crypto assets as if they were gambling products. The report claims that crypto assets have no intrinsic value and that their prices are driven by speculation and manipulation.
The report also suggests that the UK should create a new regulatory body, the Crypto Asset Agency, to oversee the crypto industry and enforce the rules. A levy on crypto transactions would fund the agency and have the power to ban or restrict certain crypto products or activities.
The report’s recommendations are based on the findings of an inquiry that the group conducted in 2022, which involved hearings with experts, regulators, and industry representatives. The inquiry found a lack of clarity and consistency in the current regulatory framework for crypto assets and that consumers are exposed to significant risks and harms.
The report’s chair, Damian Collins MP, said: “Crypto assets are a new and exciting innovation that has the potential to transform many aspects of our society. However, they also pose significant challenges and risks that must be addressed. We believe the UK should adopt a precautionary principle and regulate crypto assets as if they were gambling products. This would provide more protection and transparency for consumers and create a level playing field for the industry.”
The report’s recommendations have been met with mixed reactions from the crypto industry. Some welcomed the call for more clarity and consistency in regulating crypto assets, while others criticized the report for being too restrictive and outdated. Some also questioned the feasibility and effectiveness of regulating crypto assets as gambling products, given their global and decentralized nature.
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