A panel of UK legislators on Wednesday in a study proposed that Bitcoin, ether, and other cryptocurrencies should be regulated as gambling because they may be used by fraudsters and pose considerable risks to consumers.
“We therefore strongly recommend that the Government regulates retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service, consistent with its stated principle of ‘same risk, same regulatory outcome’,” the report said.
Britain is developing its first crypto asset regulations, which will only include anti-money laundering measures.
According to the research from parliament’s treasury committee, bitcoin and ether account for two-thirds of all crypto assets and are not backed by any currency or asset, resulting in price volatility and the possibility of losing all money invested in them.
The Financial Conduct Authority has regularly cautioned consumers that they risk lose all of their cryptocurrency investments.
Crypto assets have a total market capitalization of roughly $1.2 trillion globally, making them a minor element of the financial system, but the collapse of crypto company FTX exchange last year increased the urgency of regulating the sector.
“The events of 2022 have highlighted the risks posed to consumers by the crypto asset industry, large parts of which remain a wild west,” Harriett Baldwin, chair of the treasury committee, stated.
According to official statistics, 10% of UK citizens own or have previously owned crypto assets.
On Tuesday, the European Union approved the world’s first complete set of rules for crypto markets. International regulators are expected to establish worldwide standards soon.