The volatile price of Bitcoin and other cryptocurrencies has created millionaires and left others drowning in debt, results not unlike those seen in, say, a no-limit game of Texas hold’ em.
On Wednesday, a UK parliamentary committee stated that there is a clear link between crypto trading and poker chips trading, writing in a report that “consumer speculation in unbacked cryptoassets is more like gambling than it is a financial service.”
The Treasury Committee of the House of Commons, one of the two chambers of the British parliament, has subsequently concluded that the UK should legally treat crypto investing like betting in a casino. “We strongly recommend that the government regulate retail trading and investment activity in unbacked cryptoassets as gambling rather than a financial service,” they wrote in the report.
This is another indication of how governments are regulating the crypto industry as an increasingly close one draft– and in some cases, After— legislation.
Not surprisingly, crypto advocates are unhappy with the committee’s attitudes, including its argument that crypto assets serve “no social purpose” and have no “intrinsic value.”
“Professional investment managers see Bitcoin and other cryptoassets as a new alternative investment class—not as a form of gambling,” said Ian Taylor, board adviser at industry trade group CryptoUK. , said a statement.
He also noted that, in the UK, gambling winnings are not taxed. “Does the government want to exclude tens of millions of pounds in tax revenue from gains made on buying and selling unsupported crypto assets?” Taylor added.
Kraken, one of the largest cryptocurrency exchanges and which has a prominent presence in Europealso expressed grief.
We fundamentally disagree with the Treasury Select Committee’s conclusion that cryptoassets have no intrinsic value. It is a pity that the committee did not support the opportunity for the UK to become a real global leader in our rapidly developing industry.
A thread 🧵
— Blair Halliday (@BSHalliday) May 17, 2023
“The committee’s proposal that crypto assets should be regulated as gambling products is wrong and completely inappropriate for UK consumers,” wrote Blair Halliday, managing director of Kraken’s UK branch. “Not only does it fail the purpose and potential of the technology, but gambling protections do not provide the same protections as tailored financial services regulations.”
However, some of Crypto Twitter supported the Treasury Committee’s recommendations for classifying crypto trading as gambling—if only to hide all their crypto winnings from the tax man.
I mean all about not paying tax on crypto gains if they want it to be like gambling in the UK 😂
— Dolos (@DolosEther) May 17, 2023