A cryptocurrency advocacy group has criticized the recommendation of the UK Parliament’s Treasury Select Committee to regulate cryptocurrency trading as gambling.
Treasury Select Committee denounces crypto
In a report published on May 17, the commission urged the government to stop wasting taxpayers’ money on innovations such as virtual assets until their benefits are demonstrated.
The committee compared investing and trading cryptocurrency to gambling in terms of its potential to be addictive. According to the report, trading cryptocurrencies is similar to “betting on unbacked tokens”, adding that traders should know that they could lose all their money.
“Regardless of the regulatory regime, [crypto] price volatility and absence of intrinsic value means that unbacked crypto assets will inevitably pose significant risks to consumers. Furthermore, consumer speculation in unsupported crypto-assets is more like gambling than a financial service.
We are concerned that regulating retail and investment activities in unsupported cryptoassets as a financial service will create a ‘halo’ effect that leads consumers to believe that this activity is more secure than it is, or protected if it is not. ‘
The report also criticized the government’s recent attempt to create a non-fungible token (NFT) through the Royal Mint. According to the committee, the government should not simply encourage certain technological innovations.
Meanwhile, the UK government had to scrap the NFT plan due to lack of demand.
However, the Treasury Committee admitted that blockchain technology could benefit financial services. The Committee said:
“The most compelling use case we’ve heard is the potential for cryptoasset technologies to improve efficiency and reduce the cost of making payments, especially across borders and in low-income countries with less developed financial sectors. An effective regulatory framework would support the development of such technologies in the UK while mitigating some of the risks posed by cryptoassets.
The interest group disagrees
A pro-crypto advocacy group, CryptoUK, has a rack disagreeing with the committee’s conclusion, saying they are “useless, incorrect, fundamentally flawed and unsubstantiated”.
CryptoUK said the Treasury Select Committee’s statement did not “reflect the true nature, purpose and potential of the crypto industry,” according to the association. added.
Ian Taylor, council adviser at CryptoUK, asked if the government was willing to overlook the “tens of millions of pounds in tax revenue from profits gained from buying and selling unsupported crypto assets”?
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