In May, the UK’s cross-party parliamentary Treasury Committee suggested that the government should regulate cryptocurrencies as gambling. Today the Economic Secretary to HM Treasury, Andrew Griffith rejected the proposal unequivocally.
Griffith said it contradicts the approach of other international bodies such as IOSCO and the Financial Stability Board that instead prefer to apply the “same risks, same rules” approach to crypto-asset regulation.
He also suggested that while the Gambling Commission might be effective with gaming, crypto is not the same. “Overseeing financial risks, which are akin to those which exist within financial markets, is not within the mandate or field of expertise of the Gambling Commission,” said an appendix to Griffith’s letter.
It highlighted the risks as demonstrated by the failure of FTX, which include commingling corporate funds with investor assets, a lack of controls and risk management, unmanaged conflicts of interest, weak governance and excessive leverage.
The Secretary pointed to actions already taken by the government, such as the financial promotions regulations that should come into force later this year. In February, HM Treasury launched a consultation on crypto-assets that included a draft framework around disclosures for issuers, market abuse and the requirements for taking custody of digital assets or operating crypto trading plaforms.
Griffith reiterated the government’s intention to make the UK “a leading jurisdiction for cryptoasset technology and investment, underpinned by clear and robust regulation.”
