The United Kingdom Wants Gambling Laws to Apply to Crypto Trading
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Is investing in crypto equivalent to gambling? That’s how the United Kingdom sees it, and leaders are suggesting that crypto be regulated in the same way the U.K. oversees gambling activities.
The United Kingdom Sees Crypto Investing as Gambling
To an extent, one can argue that investing in crypto is sort of a gamble. Whenever you buy bitcoin, Ethereum, or some other digital asset, you’re taking a chance… A chance that it could go down or up. You don’t know where it will be.
The same idea applies to sitting down at a blackjack table. You could win big, or you could lose it all in a matter of minutes. In that sense, crypto and gambling are one and the same, and this is the idea that’s making its way into the financial operations of the United Kingdom.
U.K. authorities believe that like gambling, investing in crypto can be quite addictive, and thus traders won’t always know when to stop. Thus, necessary rules must be put in place to protect people from themselves. Conservative MP and Treasury committee chair Harriett Baldwin explained in an interview:
Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the U.K.’s financial services industry. However, with no intrinsic value, huge price volatility, and no discernible social good, consumer trading of cryptocurrencies like bitcoin more closely resembles gambling than a financial service and should be regulated as such. By betting on these unbacked ‘tokens,’ consumers should be aware that all their money could be lost.
Right now, nothing is set in stone, and laws and rules are merely being suggested to the U.K. Parliament. However, should these rules pass, many analysts believe they will eventually influence future crypto regulations in the United Kingdom. Some even believe they will implement themselves into the MiCA regulations recently passed by the European Union (EU).
Not everyone is happy about what’s going on. For example, a special committee under the Treasury has released a report claiming that crypto and blockchain are part of financial innovations that cannot – and should not – be governed under the Financial Conduct Authority (FCA), which is where crypto regulation would occur in the U.K. The report said:
It is not the government’s role to promote particular technological innovations for their own sake.
Some People Have Lost Everything
Like gambling, there have been many people out that have ultimately gone nuts whenever a bull market has hit. They put all their money into something, expecting and believing with all their might that they will strike it rich within a set period.
However, this isn’t always the case. Crypto is often very volatile, and in years such as 2018 and 2022, there have been many instances of crypto traders losing all they have.
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