The volatile price swings of Bitcoin and other cryptocurrencies have minted millionaires and left others drowning in debt, results not unlike those seen in, say, a game of no-limit Texas hold’em.
On Wednesday, a committee in the U.K.’s parliament made explicit the link between trading crypto and trading in poker chips, writing in a report that “consumer speculation in unbacked cryptoassets more closely resembles gambling than it does a financial service.”
The Treasury Committee in the House of Commons, one of two chambers in the British parliament, subsequently concluded that the U.K. should legally treat crypto investing like betting in a casino. “We strongly recommend that the government regulates retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service,” they wrote in the report.
It’s yet another indication of how governments may come to regulate the crypto industry as some edge closer to drafting—and in some cases, passing—legislation.
Unsurprisingly, crypto advocates were unhappy with the committee’s characterizations, including its argument that crypto assets serve “no social purpose” and have no “intrinsic value.”
“Professional investment managers see Bitcoin and other cryptoassets as a new alternative investment class—not as a form of gambling,” Ian Taylor, board adviser at industry trade group CryptoUK, said in a statement.
He also noted that, in the U.K., gambling winnings are untaxed. “Does the government really wish to exclude tens of millions of pounds in tax income from gains made by the buying and selling of unbacked crypto assets?” Taylor added.
Kraken, one of the largest cryptocurrency exchanges and which has a prominent presence in Europe, also expressed dismay.
We fundamentally disagree with the Treasury Select Committee’s conclusion that cryptoassets have no intrinsic value. It’s regrettable the committee does not support the opportunity the UK has to be a true global leader in our rapidly developing industry.
— Blair Halliday (@BSHalliday) May 17, 2023
A thread 🧵
“The committee’s suggestion that crypto assets should be regulated as gambling products is misguided and wholly unsuitable for U.K. consumers,” wrote Blair Halliday, managing director of Kraken’s U.K. branch. “Not only does this miss the purpose and potential of the technology, but gambling protections will not offer the same safeguards as bespoke financial services regulations.”
However, some on Crypto Twitter supported the Treasury Committee’s recommendations for classifying crypto trading as gambling—if only to keep all of their crypto winnings from the tax man.
I mean I’m all for not paying taxes on crypto gains if they want to class it as UK gambling 😂
— Dolos (@DolosEther) May 17, 2023