UK Lawmakers Clash: Should Crypto Be Treated Like Gambling or Financial Services?
• U.K. lawmakers are divided on how to treat crypto assets, with some supporting the government’s proposal to bring them into existing financial services regulation and others treating them as gambling.
• The House of Commons Treasury Select Committee recently suggested that crypto should be treated like gambling because of its no intrinsic value and high price volatility.
• However, an All Party Parliamentary Group for crypto assets released a report backing the government’s stance, citing tax collection and financial services regulations as reasons for doing so.
U.K. Lawmakers Clash Over Crypto Regulation
UK lawmakers appear to be divided over how digital assets should be regulated in the country, with some advocating they should be treated like gambling while others are backing the government’s plans to regulate them as financial services.
House of Commons‘ Suggestion
The House of Commons Treasury Select Committee – made up of 11 members of Parliament – recently recommended that crypto should be treated like gambling due to its lack of intrinsic value and high price volatility. This suggestion has been met with backlash from the industry since then.
APPG’s Support for Government Proposal
An All Party Parliamentary Group (APPG) for crypto assets, made up of 15 members of Parliament and Lords (from the upper chamber), released their own report on Monday supporting the government’s position to treat digital assets as regulated financial services. Chair Lisa Cameron cited tax collection and existing financial services regulations as reasons why this is beneficial for consumers and investors alike.
Crypto Gains Taxed Differently than Gambling Winnings
Law firms have pointed out that gains made from investing in crypto are usually taxed, whereas winnings from gambling are not taxed in most cases. This is another reason why it would make sense for digital assets to fall under existing financial service regulations instead of being categorized as gambling activities alone.
Overall, there appears to be disagreement among UK lawmakers regarding how digital assets should be regulated in the country: either by treating them like gambling or bringing them into scope under existing financial service laws and regulations. The APPG’s report seems to support the latter option but it remains unclear what decision will ultimately be taken by regulators on this matter going forward