The UK Treasury Committee has urged that consumer trading in unbacked cryptocurrencies, such as bitcoin and ether, be regulated similarly to gambling.
This influential cross-party Committee of MPs stated that cryptocurrencies lack intrinsic value and do not serve a beneficial social purpose, while also consuming substantial energy and being exploited by criminals in scams, fraud, and money laundering.
The Committee’s findings contrast with Prime Minister Rishi Sunak’s aspirations to position the UK as a global hub for cryptoasset technology. They question the government’s plans to regulate consumer crypto trading as a financial service, arguing that such regulation could mislead consumers into believing these activities are safe and protected when they are not.
Furthermore, the Committee drew critical parallels between Sunak’s previous enthusiasm for NFTs—now abandoned—and his support for cryptoassets. The report suggests, “Given the future benefits of crypto remain unclear, the Government should take a balanced approach to supporting the development of cryptoasset technologies and avoid wasting public resources on projects with no clear benefits, as seen with the now-abandoned Royal Mint non-fungible token (NFT). It should not be the Government’s role to promote specific technological innovations for their own sake.”
Harriett Baldwin MP, chair of the Treasury Committee, emphasized that recent events have highlighted the risks to consumers posed by the cryptoasset industry, which she described as largely a “wild west.” She stated, “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. Consumers should be aware that by betting on these unbacked ‘tokens’, they could lose all their money.”
These conclusions have been vigorously contested by industry association CryptoUK. Ian Taylor, a board advisor at CryptoUK, expressed concerns about the Committee’s claims, deeming them “unhelpful, false, fundamentally flawed, and unsubstantiated.” He argued that the statement does not accurately represent the true nature, purpose, and potential of the crypto industry.
While acknowledging that consumer risks exist and should be addressed through education and a more robust regulatory framework, he asserted that equating cryptocurrency with gambling is both misleading and incorrect.