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Lawmakers want crypto regulated as gambling

That includes the high-profile collapse of cryptocurrency Terra in mid-2022 and the failure of exchange FTX later that year…reports Asian Lite News

Cryptocurrency investments in Britain should be regulated like the gambling industry, UK lawmakers said on Wednesday.

The plea, from parliament’s powerful cross-party Treasury Committee, came one day after EU ministers agreed on tougher tax rules for crypto transactions.

Global authorities are increasingly anxious of the lack of oversight of the sector, whose most popular units are bitcoin and ether.

“Unbacked cryptoassets have no intrinsic value, and their price volatility exposes consumers to the potential for substantial gains or losses, while serving no useful social purpose,” the Treasury Committee said in a report.

“These characteristics more closely resemble gambling than a financial service, an impression reinforced by the evidence we have received of consumer behaviour.” It continued: “We therefore strongly recommend that the government regulates retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service.”

The value of the global cryptocurrency market, boosted by keen demand from small investors during Covid lockdowns, hit a peak of about $3.0 trillion in late 2021, but then fell off a cliff and currently stands at just over $1.1 trillion.

The industry, which craves acceptance by traditional finance, has been rocked by a series of scandals.

That includes the high-profile collapse of cryptocurrency Terra in mid-2022 and the failure of exchange FTX later that year.

The Treasury Committee expressed caution on Wednesday over risks posed by “poorly run businesses” in the sector, as well as the increasing use of crypto by fraudsters and other criminals.

Britain’s Conservative government, led by Prime Minister Rishi Sunak, is looking to establish a regulatory framework for crypto as it seeks to avoid falling behind the EU and United States.

“It is not the government’s role to promote particular technological innovations for their own sake,” the committee report added Wednesday.

It also criticised Britain’s aborted project to sell non-fungible tokens (NFTs), or digital tokens based on crypto technology. Sunak unveiled the initiative as finance minister in April 2022.

The committee however praised UK proposals for greater regulation of professional crypto investors.

It added cryptocurrencies could potentially be used “to improve efficiency and reduce the cost of making payments”.

The European Union meanwhile took more steps this week to protect investors.

EU finance ministers agreed Tuesday on rules to go after individuals who stash their cash where tax authorities have no oversight.

The 27-member bloc’s parliament last month approved the world’s first comprehensive rules covering crypto assets.

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EU News

EU sanctions 351 Russian lawmakers  

Additionally, trade between EU countries and the breakaway regions is banned…reports Asian Lite News

The European Union has agreed to sanction the 351 members of the State Duma who voted in favour of Russia’s recognition of the self-proclaimed people’s republics of Donetsk and Luhansk, in eastern Ukraine.

The bloc will also punish 27 individuals and entities accused of destabilising Ukraine, waging disinformation campaigns and providing financial support to the two separatist regions.

The targets will come from the political, military, business and media sectors, and will be subject to asset freezes and travel bans, which means they will not be allowed to enter or transit through EU territory.

“This is a clear escalation of Russian aggression against Ukraine,” said Josep Borell, the EU’s top diplomat, in a press conference in Paris.

“We demonstrate our determination to respond robustly to latest developments.”

The new package of sanctions also limits the Russian government’s access to the EU’s capital and financial services markets and blocks the refinancing of Russian sovereign debt. Banks that “finance the Russian military apparatus” will also be penalised.

Additionally, trade between EU countries and the breakaway regions is banned.

By going after commercial links, the bloc wants to prevent Moscow from raising additional funds that could be used to bankroll the military campaign that has begun in eastern Ukraine.

“We will make it as difficult as possible for the Kremlin to pursue its aggressive policies,” said European Commission President Ursula von der Leyen in a separate statement.

The EU is Russia’s biggest trade partner, accounting for 37.3% of the country’s total trade in goods in 2020, according to the European Commission. The bloc gets over 40% of its gas and 26% of its oil from Russia, a dependency that officials have rushed in recent weeks to palliate through the purchase of liquified natural gas (LNG) from countries like Norway, Qatar and Azerbaijan.

Both von der Leyen and Borrell praised Germany’s decision to stop the certification process of Nord Stream 2, the controversial gas pipeline that would bring extra Russian gas to Europe.

“I think the German government is absolutely right. Nord Stream 2 has to be assessed in light of the security of energy supply for the whole of Europe,” said von der Leyen.

The new sanctions were adopted unanimously by all 27 member states at the end of an extraordinary meeting of foreign affairs ministers in Paris. The final details will be finalised in the coming days and the specific targets will be made public.

Borrell admitted the bloc “could’ve gone further” but compromises had to be made to accommodate the positions of all countries. He noted the bloc was ready to impose further penalties if the situation at the border deteriorates and turns more violent.

“We didn’t want to show off all our cards from the beginning,” he said, calling Tuesday’s package a “first step.”

He confirmed that Putin is not on the sanctions list.

The Duma voted in favour of recognition on 15 February, arguing the Western-aligned government in Kyiv posed a threat to the pro-Russian majority in the Donbas region.

The Donetsk People’s Republic (DPR) and the Luhansk People’s Republic (LPR) were established in the spring of 2014 following the Maidan Revolution and the ousting of President Viktor Yanukovych, a dramatic episode that took place exactly eight years ago.

President Vladimir Putin “really had this date clearly in mind,” said Borrell.

The Ukrainian government considers the DPR and LPR as terrorist organisations and sees the provinces as occupied territories, like the Crimea peninsula.

The bloc’s response comes after the US and the UK announced similar moves to cripple the economy of the DPR and LPR in a bid to add pressure on the Kremlin.

“We’re afraid, we believe this story has not finished,” said Borrell.

“The risk of conflict is real and we need to prevent it at all costs.”

The EU had previously imposed sanctions on 193 persons, such as judges, prosecutors and Duma legislators, and 48 entities accused of undermining Ukraine’s territorial integrity in Crimea and Sevastopol.

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