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UK Committee Proposes Crypto Gambling Regulations for Retail Trading

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UK Treasury Committee Comprised of Parliament Members.

Cryptocurrency Gaming Winnings to Face Highest Tax Rate.

A UK regulatory group, the Treasury Select Committee, composed of members of Parliament, has released a report stating that unbacked cryptocurrencies like Bitcoin (BTC) should be treated as gambling for retail investors. The committee “strongly recommends” adopting this approach in the trading of digital assets.

This recommendation comes after conducting a thorough study on effective methods of monitoring crypto assets. However, if cryptocurrency trading were regulated similarly to gambling, it would be contrary to the approach taken by other countries.

The report mentioned:

“We are worried that if retail trading and investment in unbacked cryptoassets are regulated as a financial service, it may give consumers a false sense of security, leading them to believe that the activity is safer or protected when it’s not.”

Lack of Real Value and Significant Price Fluctuations.

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Presently, around 10% of people in the UK own some form of cryptocurrency. As per convention, the UK government is required to respond to the report within two months of its publication.

The UK panel holds the belief that digital assets lack inherent value, exhibit substantial price fluctuations, and do not contribute to any clear social benefits. This is why they compare investing in Bitcoin to sports betting, highlighting a significant difference from more traditional forms of investment.

Furthermore, cryptocurrency gaming winnings will be subjected to the highest tax rate. Similar to the gaming industry, crypto players will be required to verify the identities of their clients and implement measures to prevent money laundering.

The United Kingdom’s actions are not unique as other countries, such as Singapore, have also implemented measures to limit retail cryptocurrency trading. Singaporean authorities caution against individuals investing in cryptocurrencies due to their significant volatility.

This information is for general knowledge only and should not be considered as advice for investing or making financial decisions.

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