UK Government Rejects Regulating Cryptocurrency Sector as Gambling; Aims to Embrace Web3 Innovation Instead

UK Government Rejects Regulating Cryptocurrency Sector as Gambling; Aims to Embrace Web3 Innovation Instead

In a recent development, the UK government has firmly dismissed the idea of regulating the cryptocurrency sector as gambling. Financial services minister Andrew Griffith stated that the government disagrees with the Treasury Committee’s recommendations to classify retail trading and investment in crypto assets as gambling. Instead, they intend to oversee the crypto industry similar to other financial services, aligning with global regulators.

The Treasury Committee’s May report had suggested that cryptocurrencies like bitcoin and ether hold no intrinsic value and serve no meaningful social purpose, proposing they be regulated as gambling instruments. However, Griffith argued that such a regulatory approach would not effectively address risk factors, as evidenced by the collapse of the crypto exchange FTX last year.

In response to the report, crypto trading firms humorously questioned whether this move would protect their profits from capital gains tax, highlighting the tax advantages currently associated with cryptocurrencies.

Interestingly, the UK Prime Minister, Rishi Sunak, had announced plans to establish the country as a web3 hub, emphasizing the need for regulatory clarity for crypto businesses operating in the UK. Sunak sees blockchain-powered web3 innovations as a crucial opportunity to foster startup growth and boost the nation’s economy.

In summary, the UK government’s rejection of regulating cryptocurrencies as gambling reflects their commitment to embracing emerging web3 technologies while ensuring appropriate regulatory oversight in line with the broader financial services industry.