Crypto Treated Like Gambling or Stocks? UK Regulators Divided


  • As the UK builds its crypto framework, it is getting a lot of different advice.
  • MPs feel that crypto is akin to gambling; others liken it to stocks.
  • Either way, the UK has promised to be friendly to crypto, even if it’s viewed as a gamble. 

The UK government has made promises to be friendly in its approach to crypto regulation. Still, as it mulls over a framework, it is given plenty of advice from different sectors. 

Following advice from parliament’s Treasury committee that crypto should be treated like gambling by UK regulators, a global markets watchdog has urged the UK to regulate crypto the same way it would traditional assets, like stocks. 

The International Organization of Securities Commissions (Iosco), of which the UK’s Financial Conduct Authority (FCA) and the U.S.’s SEC are members, said its members should regulate this new digital asset space in ways that “are the same as, or consistent with, those that are required in traditional financial markets.”

Clear and Concise Rules

Iosco’s recommendation to treat cryptos like stocks and bonds appears to be an attempt to gain clear and concise global regulation of the space. There are different approaches, frameworks, and stances on crypto, which Iosco feels could lead to regulatory arbitrage – a practice in which businesses take advantage of loopholes in various countries’ regulations.

Rather, Iosco would have it so trading platforms have to publicly disclose how they assess crypto coins and tokens before offering them for trading. These platforms would have to clearly explain how they store and safeguard clients’ crypto and also prove assets are separated from the exchange’s own assets – as was the issue with FTX

Varying Approaches

While Iosco’s approach appears more in line with the general usage of many cryptos – using them as investment vehicles – British MPs view trading in cryptos as akin to gambling

MPs on the Treasury select committee worry that crypto trading, like gambling, can be addictive. Furthermore, they believe that investors ‘betting’ on the price of unbacked coins and tokens could lead to massive financial losses. 

The MPs are also worried that if the FCA were to take cryptos under their jurisdiction, it would lead investors to believe the industry was “safer than it is” or that they were protected from financial losses.

On the Flipside

  • The UK government is likely to place that responsibility of regulating crypto with the FCA, which currently ensures businesses comply with money-laundering rules. If this is the case, the FCA will probably regulate cryptos with a hybrid approach.

Why This Matters

The direction regulators take in regulating cryptos will undoubtedly impact how the sector operates in the UK. However, the government is determined to empower innovation and allow these digital assets to flourish – but will they thrive like stocks, or like betting shops? 

Read more about recent gambling reforms in the UK:

Crypto Assets Unscathed in UK’s New Gambling Reforms

Read more about Hong Kong’s crypto rules:

Crypto Investors Can Trade Under New Hong Kong Rules from June 1st



Source link: https://dailycoin.com/crypto-treated-like-gambling-or-stocks-uk-regulators-divided/

Sponsors

spot_img

Latest

Jonny Wilkinson calls time on international career

England’s World Cup-winning fly-half Jonny Wilkinson retired from international rugby on this day in 2011.Wilkinson will always be remembered for his drop...

Sweet Chili Sauce – A Beautiful Mess

While there is nothing wrong with buying a jar of sweet chili sauce at the store, what you might not know is you...

Burt nets five goals for Cheboygan in 6-0 Senior Night victory

“It’s just a great story,” Markham said of Spence. “It was Gregg’s teammates at Walmart, in the automotive department, they made a homemade...

How NASA might find life on a moon of Saturn while skipping the hardest part

Researchers believe they may be able to suss out whether microscopic aliens exist on one of Saturn's 83 moons without having to land...

U.S. government urges immediate recall of airbag inflators across automakers

More than 67 million airbag inflators may be recalled(opens in a new tab) due to safety concerns, following the results of a National...