Andrew Griffith, U.K’s Economic Secretary to the Treasury, has firmly rejected the recommendation by the Parliament Treasury Select Committee to regulate cryptocurrency trading as gambling. In a response published on July 20, Griffith outlined his position on the matter, stating that such regulation would create a misalignment with international standards and other major jurisdictions, including the European Union.
The Treasury Committee had previously equated cryptocurrency investing and trading to gambling and recommended that the industry be subjected to similar regulatory frameworks. However, Griffith argued that such an approach would not adequately address the risks associated with the industry and result in overlapping mandates between financial regulators and the Gambling Commission.
Griffith highlighted that international organizations like the International Organization of Securities Commissions (IOSCO) and the G20 Financial Stability Board (FSB) have already introduced recommendations that effectively address the regulatory risks involved in the crypto sector. He emphasized the principle of “same activity, same risk, same regulatory outcome,” which ensures that any cryptoasset activity similar to traditional financial services is subject to equivalent regulation.
The Economic Secretary emphasized the importance of developing an appropriate financial services regulatory framework for the cryptocurrency industry. He emphasized the need to address the risks associated with unbacked crypto assets and provide conditions for safe innovation.
Simultaneously, Griffith assured that proactive measures were being taken by the government to combat the issue of consumers being misinformed about cryptocurrencies. He explained that there is a dedicated financial promotions regulatory regime for crypto assets and that proposals are being considered to ensure that consumers have access to accurate information when making investment decisions.
The Financial Conduct Authority (FCA) in the U.K. has also played a role in ensuring consumer protection within the cryptocurrency industry. Earlier this month, it issued a warning to crypto firms and advertisers, urging them to comply with the upcoming financial promotions regime that will be implemented in the industry by October.
Andrew Griffith rejects the notion that cryptocurrency trading should be regulated as gambling. Instead, he advocates for the development of a robust financial services framework that effectively addresses the risks associated with the crypto sector. Measures are being undertaken by the government, including a financial promotions regulatory regime and initiatives to ensure consumers have access to accurate information. By aligning with international standards and recommendations, the U.K. aims to provide a secure and stable environment for cryptocurrency innovation and investment.