According to Parliament’s Treasury Committee, cryptocurrency trading should be treated as a form of gambling rather than a financial service.
A report published on Wednesday said that MPs must use fewer taxpayer funds to promote technological innovations such as digital tokens without demonstrating clear benefits to the public.
It has been concluded that cryptocurrency trading and investing can be addictive, just like gambling. However, consumers may have to pay life-changing cash rates if they bet on the volatility of an unbacked asset like Bitcoin.
Cryptocurrency trading in the UK is a growing industry, with more and more people looking to invest in digital assets. However, there are many risks associated with cryptocurrency trading, and you must do your research before getting involved.
One of the most significant risks of cryptocurrency trading is market volatility. Cryptocurrencies can fluctuate wildly in price, and you can lose money if you’re not careful. It is essential only to invest money you can afford to lose and only invest what you can.
Another risk in cryptocurrency trading is the potential for fraud. There have been several scams involving cryptocurrency, And being aware of the risks is essential before you start trading. Use only reputable exchanges, and don’t give your private keys to anyone.
When considering trading cryptocurrencies, you must research and understand the risks involved. Trading cryptocurrency can be a risky investment, But it can be a very rewarding one. If you’re willing to risk, trading cryptocurrencies can be a great way to make money.
Here are some tips for trading cryptocurrency in the UK:
- Only invest as much money as you can afford to lose.
- Do your research to understand the risks involved.
- Use a respected exchange.
- Never share your private key with anyone.
- Be patient, and don’t expect to get rich fast.
If you follow these tips, you can minimize your risk of losing money and increase your chances of success in cryptocurrency trading.
UK cryptocurrency exchanges include the following:
- Itoro
- coin base
- Kraken
- the Gemini
- The Binance
With these exchanges, you can select your needs best based on their features and services.
If you are new to cryptocurrency trading, start with a small amount of money and learn the ropes before investing more. There are several resources available online to help learn about cryptocurrency trading, such as:
The Bitcoin Wiki
The Ethereum wiki
The Binance Academy
The Coinbase Learning Center
A Conservative MP and Chair of the Treasury Committee, Harriet Baldwin, said: “Financial services should be regulated effectively to protect their consumers and to support innovative products.” “However, with no intrinsic value, huge price volatility, and no social good, consumer transactions in cryptocurrencies like bitcoin are more akin to gambling than a financial service and should thus be regulated.
“By betting on these unbacked ‘tokens’, consumers should be aware that they may lose all their money.”
The recommendations may directly impact the government’s plans to regulate cryptocurrencies, which are currently being considered following an earlier consultation.
As expected, cryptocurrency trading would eventually fall under the Financial Conduct Authority, which currently oversees money-laundering rules and will soon oversee advertising.
As a result, the Treasury Committee fears that investing in cryptocurrency trading or financial services – and regulating them through the FCA – could create a “halo effect,” giving consumers the impression that the industry is safe or protected. Financial losses, too, when they do.
The report states that regulating cryptocurrencies as gambling would be consistent with the government’s “same risk, same regulatory consequences” policy.
Cryptocurrency trading is a popular activity in the UK and is subject to regulations and guidelines set by the Financial Conduct Authority (FCA). Some key points to consider when engaging in cryptocurrency trading here in the UK:
Exchanges: Several cryptocurrency exchanges in the UK allow users to buy, sell and trade cryptocurrencies. Some popular discussions include Coinbase, Binance, Kraken, and Bitstamp. Choosing a reputable exchange registered with the FCA with solid security measures is essential.
KYC / AML Requirements: Most cryptocurrency exchanges in the UK require users to complete a Know Your Customer (KYC) process, which involves providing identification documents and verifying their identity.
This is to prevent money laundering and other illegal activities.
Taxation: Trading cryptocurrency is subject to taxation in the UK, and HM Revenue and Customs (HMRC) has guided how cryptocurrencies are treated for tax purposes. Generally, profits from cryptocurrency trading are subject to capital gains tax, and keeping records of your trades and reporting them accurately on your tax return is essential.
Security: The security of your cryptocurrency holdings is essential to prioritize. Use strong passwords, enable two-factor authentication, and consider using a hardware wallet or cold storage solution to store your cryptocurrency offline.
Regulation: The FCA regulates some aspects of the cryptocurrency industry in the UK, particularly the activities that fall under its jurisdiction. The FCA has applied anti-money laundering (AML) and counter-terrorist financing (CTF) regulations to cryptocurrency businesses operating in the UK.
Risks: Cryptocurrency trading carries risks, including price volatility and the possibility of financial loss. Understanding the market dynamics, research, and investing only in what you can afford to lose is crucial.
Education and Resources: Stay updated with the latest developments in cryptocurrency markets and educate yourself on trading strategies, risk management and technical analysis. Countless resources, such as online courses, forums and educational materials, are available to help you improve your trading skills.
The report also highlights the government’s recent efforts to create a non-fungible token through the Royal Mint. The blockchain is the decentralized ledger of transactions used for buying and selling cryptocurrencies like Bitcoin, which are unique digital assets. However, the scheme – which Labor criticized as a “crypto gimmick” – was scrapped in March, just a year after the project was announced.
The Treasury Committee said it urged the government to take a “balanced approach” to the technology and “avoid spending public resources to support crypto asset activities in a clear, beneficial use case”, adding that the failed NFT project was “a case in point”. It said: “It is not the role of government to promote particular technological innovations for its own sake.”
