Benzinga - In response to the U.K. Treasury Committee's recommendations to regulate crypto assets as gambling instruments, U.K. Financial Services Minister Andrew Griffith expressed the Finance Ministry's firm disagreement with such a proposal.
In a letter to the Treasury Committee, Griffith emphasized that classifying crypto assets as gambling would be inconsistent with globally agreed-upon recommendations from international organizations and standard-setting bodies.
Griffith highlighted that international organizations like the International Organization of Securities Commissions (IOSCO) and the G20 Financial Stability Board (FSB) advocate for a "same activity, same risk, same regulatory outcome" principle.
This means that any crypto asset activity with similar functions and risks to traditional financial activities, such as operating a trading platform or providing custody services, should be subject to equivalent regulatory oversight.
Implementing a gambling regulation framework for crypto assets could lead to misalignment with international standards, including those set by the European Union, and potentially result in overlapping mandates between financial regulators and the Gambling Commission.
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Griffith emphasized that a financial services regulatory framework is more appropriate for addressing the risks associated with unbacked crypto assets and promoting safe innovation.
Griffith noted that the government is already taking concrete action in regulating crypto assets by introducing a dedicated financial promotions regulatory regime.
Legislation was recently laid before Parliament and is set to be in force by late 2023.
Additionally, proposals from HM Treasury's recent consultation aim to ensure consumers have access to accurate information when making investment decisions, including the introduction of a robust issuance disclosure regime.
The Finance Ministry remains committed to making the U.K. a leading jurisdiction for crypto asset technology and investment, supported by clear and robust regulation.
Griffith expressed willingness to collaborate with the Treasury Committee as they work towards this shared goal.
The U.K. Treasury Committee released a report in May that recommended classifying crypto assets as gambling instruments, stating that they have no intrinsic value and serve no useful social purpose.
The report called for government regulation of these assets accordingly.
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