Kraken, UK trade body derides lawmaker description of crypto as ‘gambling’

The specific degree to which crypto would be managed “as gambling” has not been defined by the Treasury, however, the report recommended enforcing strong regulation and standards relating to consumer securities, anti-money laundering, and terrorism financing.Magazine: Cryptocurrency trading addiction– What to keep an eye out for and how it is treated

Self-regulatory company CryptoUK and crypto exchange Kraken UK has actually knocked a recent report from a panel of British lawmakers that suggested crypto should be controlled in a similar vein to gambling.In a May 17 report, the Treasury Committee “highly suggested” that unbacked crypto be regulated as betting due to issues over the “considerable” consumer risks related to the property class, such as price volatility and lack of intrinsic value. It eventually called for crypto to be controlled under the concept of “same risk, same regulative outcome.” The relocation has actually not gone down well with regional players, specifically considered that the United Kingdom is believed to be heading toward ending up being a progressive crypto center. In a May 17 declaration shared with Cointelegraph, CryptoUK argued that “taking this method will not take into account the subtleties of the sector and the real opportunities for inward investment and growth for the UK economy as an entire,” adding that: “No other international jurisdiction has taken this technique and referencing MiCA in the EU, we need to be taking a bespoke and tailored technique for policy within the industry to ensure the UK does not become a hostile environment for services to be domiciled.” The company likewise suggested that such an approach may eventually result in U.K. consumers rather looking for overseas crypto platforms to engage with, which it feels is” completely versus the goal of protecting these consumers through guideline.” In Kraken UKs statement, the company stressed that it “essentially” disagrees with the Treasurys “conclusion that cryptoassets have no intrinsic value.” Related: UK financial watchdog reveals inspections versus websites with suspected prohibited crypto ATMs” Its regrettable the committee does not support the chance the UK has to be a true international leader in our quickly establishing market,” the firm said, adding:” The committees tip that crypto properties need to be controlled as gaming items is completely inappropriate and misdirected for UK consumers. It argued that not just does it “miss the purpose and capacity of the technology,” but noted that gambling defenses do not provide the very same safeguards as financial services regulations.CryptoUK indicated a potential loss of capital gains tax need to crypto trading be related to as betting.” Gambling is exempt from capital gains tax. Does the UK government desire to omit 10s of millions of pounds in tax income from gains made by the trading of unbacked crypto assets?,” CryptoUK mentioned. Obviously not, however its so exceptionally ridiculous that this is the result of an assessment that was VERY well attended by written evidence from individuals involved– laurence (@functi0nZer0) May 17, 2023

Other Questions People Ask

What is Kraken's stance on the UK lawmakers' description of crypto as 'gambling'?

Kraken has expressed strong disagreement with the UK Treasury Committee's suggestion that crypto assets should be regulated similarly to gambling. The company argues that this perspective overlooks the potential of the technology and the opportunities for the UK to become a global leader in the crypto market. Kraken emphasizes that treating crypto as gambling misrepresents its value and fails to provide adequate consumer protections compared to financial services regulations.

How does CryptoUK respond to the UK's proposed regulation of crypto as gambling?

CryptoUK has criticized the recommendation from the UK Treasury Committee, stating that it does not consider the complexities of the crypto sector. They argue that such an approach could deter investment and growth in the UK economy, pushing consumers towards overseas platforms instead. The organization also highlights that classifying crypto trading as gambling could lead to significant tax revenue losses for the government, as gambling is exempt from capital gains tax.

What are the potential implications of regulating crypto like gambling in the UK?

If crypto is regulated as gambling, it could lead to a lack of consumer protections that are typically associated with financial services. This misclassification may also result in UK consumers seeking out foreign platforms for their crypto transactions, undermining the goal of protecting them through regulation. Additionally, such a move could have broader economic implications, including a potential loss of tax revenue from capital gains on crypto trading.

What concerns did Kraken raise regarding the Treasury's conclusions about crypto assets?

Kraken raised concerns that the Treasury's conclusion that crypto assets lack intrinsic value is fundamentally flawed. They argue that this view not only misrepresents the technology but also diminishes the UK's potential to lead in the rapidly evolving crypto market. Kraken believes that equating crypto with gambling fails to recognize its unique characteristics and risks, which require a more nuanced regulatory approach.

Why does CryptoUK believe a bespoke regulatory approach is necessary for crypto in the UK?

CryptoUK advocates for a tailored regulatory framework for crypto, arguing that a one-size-fits-all approach akin to gambling regulations would be detrimental. They emphasize that no other jurisdiction has adopted such a strategy and that it could stifle innovation and investment in the UK. A bespoke approach would better address the specific risks and opportunities within the crypto sector, ensuring that the UK remains an attractive environment for businesses and consumers alike.