LONDON: UK lawmakers have urged for stricter regulation of cryptocurrency investments in Britain, drawing parallels with the gambling industry. The influential cross-party Treasury Committee made this plea just a day after EU ministers agreed on tougher tax rules for cryptocurrency transactions. Growing concerns over the lack of oversight in the cryptocurrency sector, particularly with popular units like Bitcoin and ether, have prompted calls for action.
In a comprehensive report, the Treasury Committee highlighted that “Unbacked crypto assets hold no intrinsic value, and their price volatility exposes consumers to significant gains or losses without serving any useful social purpose.” Citing evidence of consumer behavior, the committee likened the characteristics of crypto assets to gambling rather than financial services. As a result, they strongly recommended that the government classify retail trading and investment activities involving unbacked crypto assets as gambling, rather than considering them as financial services.
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The global cryptocurrency market, which witnessed a surge in demand from individual investors during the Covid lockdowns, reached its peak of around $3.0 trillion in late 2021. However, it has since experienced a significant decline and is currently valued at just over $1.1 trillion. The industry, seeking acceptance from traditional finance, has been rattled by various scandals, including the collapse of cryptocurrency Terra in mid-2022 and the subsequent failure of exchange FTX later that same year.
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