The Gambling Act review is happening, however slowly, and as MPs and industry bodies try to thrash out the details, a new qualm has been brought up. Cryptocurrencies seem to also need tougher regulation, and the United Kingdom has not hesitated to act in that direction, although the latest proposal, which asks for crypto to be regulated as gambling – or somehow piggyback on the Gambling Act review, may not be the best.
The government has been moving quickly on crypto. It suspended crypto ads from the metro service and evicted Binance, a major crypto exchange, from the country. Nonfungible tokens (NFTs) are nevertheless proliferating in the country, but so are new measures designed to protect consumers.
One Stone, Two Birds
The country’s Advertising Standards Authority (ASA) recently took issue with Arsenal Football Club over the promotion of fan tokens, NFTs that are used to weigh in on club decisions and access other experiences. Now, a growing number of MPs are asking for cryptocurrencies to be more or less included in the upcoming gambling review.
The report, published by iNews, outlines fears among MPs that the general approach towards crypto has been too lax. This seems to strike home with the Financial Conduct Authority (FCA), the main financial regulator in the country, which also believes that the crypto sector has been left out as a sort of a “Wild Wes.”
Richard Holden, a conservative member of parliament, has argued that crypto investments could “quite easily and sensibly be considered gambling.” The end goal is to issue guidance that would protect consumers, he argues.
Lumping crypto regulation with the gambling review would not make much sense unless it is mainly involved and targets platforms that use crypto as their main betting currency. Even then, any review passed with a focus on gambling would hardly regulate the broader legitimacy of crypto in the United Kingdom.
Good Sentiment, But Wrong Approach
The Bank of England has called on homologs from around the world and financial regulators, in general, to come together and create a framework that allows a stronger response to the growing sector of NFTs, decentralized finance known as DeFi, private cryptocurrencies, altcoins, and stablecoins.
An ex-Jeremy Corbyn aide, Matt Zarb-Cousin, echoed the concerns put forward by Holden, arguing that promoting cryptocurrencies through soccer is a dangerous precedent that could have life-ruining consequences on vulnerable consumers.
The FCA has reminded consumers that the high-risk profile of cryptocurrencies meant that people should be prepared to lose all of their money.