MPs in the UK have called for the government to treat retail investment in cryptocurrencies, such as Bitcoin, as a form of gambling. The Treasury Select Committee found that the highly volatile nature of cryptocurrencies and the potential for investors to lose their entire investments bear resemblance to gambling. The committee also criticized the Royal Mint’s abandoned plans to introduce a non-fungible token (NFT).
In response, the Treasury stated that it does not support regulating cryptocurrency investment under gambling laws. A Treasury official highlighted that the risks associated with cryptocurrencies are similar to those found in traditional financial services, suggesting that financial services regulation is better suited to address these risks.
However, the committee’s findings were strongly rejected by trade association CryptoUK, which deemed the MPs’ observations about cryptocurrencies as “unhelpful, false, fundamentally flawed, and unsubstantiated.”
GamCare, a gambling helpline charity, reported that it had received inquiries from over 300 individuals who were struggling with investments in cryptocurrencies and other online financial markets. Research cited by the MPs revealed that 40% of new Bitcoin users were risk-seeking men under the age of 35.
A former gambling addict shared his experience of turning to cryptocurrency investments, highlighting that despite viewing it as an investment rather than gambling, he ended up losing £150,000, including borrowed money. He supported the committee’s approach, stating that “crypto stuff is gambling” and emphasized the potential for investors to lose everything they have.
Conservative MP Tracey Crouch, a former sports minister and advocate for responsible gambling, has welcomed a report urging the government to treat cryptocurrency investment as a form of gambling. Crouch compared the current state of the cryptocurrency market to a lawless “Wild West town” and called for the Gambling Commission to play a role in regulating this risky and often confusing sector. She highlighted the influence of sports sponsorships, particularly in football, which can create a false perception of safety for consumers.
Cryptocurrency sponsorships have been prevalent among football clubs, but Premier League teams recently made a voluntary commitment to end gambling sponsorships on their shirts from 2026. The report, however, does not provide specific details on how gambling regulation could be applied to cryptocurrencies. Committee chair Harriett Baldwin stated that the report recommends treating the speculative promotion of cryptocurrencies as gambling, noting concerns about football clubs capitalizing on their loyal supporters’ investments.
The report also criticizes the government’s plans to regulate cryptocurrencies as financial services, cautioning that such regulation may falsely portray these assets as secure investments. It emphasizes the importance of dispelling the “halo effect” that misleads consumers into believing that cryptocurrency activity is safer or protected when it is not.
According to surveys cited in the report, approximately one in ten people in the UK hold crypto assets, with many citing the “fun investment” aspect as their main motivation.
MPs have raised concerns about the potential risks and uncertain benefits associated with cryptocurrencies and other crypto asset technologies. While the government has shown excitement about the possibilities of crypto, MPs emphasize the need to address the real and immediate risks these assets pose to consumers and the environment.
During his time as chancellor, Rishi Sunak expressed the ambition to position the UK as a global hub for crypto. The Treasury acknowledges the opportunities presented by crypto but stresses the importance of robust regulation that promotes innovation while effectively addressing the most pressing risks.
CryptoUK’s Ian Taylor highlights the increasing acceptance of crypto assets by the finance industry, with professional investment managers considering them as a new alternative investment class rather than a form of gambling. However, the committee calls for a balanced approach, recommending that the government refrain from allocating public resources to projects without clear beneficial purposes.
The committee also draws attention to the government’s involvement in non-fungible tokens (NFTs), noting the recent abandonment of the Royal Mint’s NFT initiative. MPs argue that it is not the government’s role to promote technological innovations without clear justification.
In a separate report, the committee plans to explore central bank digital currencies, further examining their implications.