LONDON- Bitcoin ether and other cryptocurrencies should be regulated as gambling given they are potentially used by fraudsters and pose significant risks to consumers, a panel of UK lawmakers said in a report on Wednesday.
Britain is planning its first rules for cryptoassets, which currently only comply with anti-money laundering safeguards.
Bitcoin and ether account for two-thirds of all cryptoassets and are not backed by any currency or asset, leading to volatility in prices and the potential for all money invested in them to be wiped out, the report from parliament’s treasury committee said.
Regulating retail trading and investment in unbacked cryptocurrencies could create a ‘halo’ effect that leads consumers to think the activity is safer than it is, or protected when it is not, it said.
“We therefore strongly recommend that the Government regulates retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service, consistent with its stated principle of ‘same risk, same regulatory outcome’,” the report said.
The Financial Conduct Authority has repeatedly warned consumers they could lose all of their money invested in cryptocurrencies. -Reuters
