May 17, 2023

UK Lawmakers Recommend Regulating Crypto Trading as Gambling

The U.K. Treasury Committee has released a report today, advocating for the regulation of retail crypto trading and investment activity as gambling, instead of a financial service. The report, which was published by the House of Commons Committee, argued that the price volatility and lack of intrinsic value of cryptoassets such as Bitcoin (BTC) and Ether (ETH) should be treated as gambling, in order to protect consumers from the “significant risks” posed by these assets.

The committee, which is chaired by Harriett Baldwin, consists of 11 members of Parliament from the Labor and Conservative parties, as well as the Scottish National Party. They launched the inquiry into the crypto industry last July, in order to explore the role of cryptoassets in the U.K.

The committee noted that the potential for crypto assets and their underlying technology to bring benefits to financial services and markets should be supported by an effective regulatory framework that mitigates risks. To this end, they welcomed the Government’s plans to regulate cryptoassets used in financial services.

In their arguments, the lawmakers referred to written statements from Dr. Larisa Yarovaya, an associate professor from the University of Southhampton, who said crypto exchanges, online trading platforms and other crypto-asset businesses should be regulated with the same stringency as crypto speculation “can be addictive.”

Research conducted by His Majesty’s Revenue and Customs (HMRC) in 2021 revealed that 10% of U.K. citizens hold or have held crypto, with more than 55% having never sold any. According to the Chainalysis Crypto Adoption Index, the United Kingdom is ranked 17th in terms of crypto adoption.

The report comes at an opportune time, as more and more companies are turning to the web3 space for promotion and marketing of their Non-Fungible Tokens (NFTs). The growing demand for NFTs has led to the emergence of specialized NFT marketing agencies, as well as the use of Twitter for NFT marketing.

These agencies are offering a range of services, from creating and selling NFTs, to helping companies promote their NFTs on social media platforms. They are also helping companies to create a web3 presence, and to build up their brand in the web3 space.

As the demand for NFTs continues to grow, the need for companies to create and promote their NFTs in a compliant and responsible manner is becoming increasingly important. The U.K. Treasury Committee’s report is a positive step in the right direction, as it provides a framework for regulating the crypto industry in the U.K. and protecting consumers from the risks associated with crypto trading and investment.

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