Investing in cryptocurrency is gambling, MPs say
Digital currency’s volatile prices and risk of losses pose significant risks to consumers
Therefore contracts are not enforcible in law and nor are taxes chargeable.
HMRC will be interested to know that.
They meant it’s *like* gambling, not that it *is*.
All investment is gambling.
Crypto is just longer odds.
@philip
Hardly. Fixed interest securities are usually regarded as investment. But there’s a stated return which produces a reliable market to provide liquidity.
Crypto doesn’t even have the confidence it can be readily exchanged for goods & services that gives currency value. It’s purely a speculation on what other speculators consider its worth against conventional currencies.
I presume the greedy bastards at HMRC are treating the profits on crypto the same way as they do on currency trading. Be interesting to know what the position is on trading around between cryptos. Do the profits only crystallise if you cash out into the world of real currencies? HMRC accept payments in crypto?
and nor?
The primary difference between gambling and investing in crypto is that most gamblers understand gambling, whereas most crypto investors don’t understand crypto.
At its peak I was asked the “What do you think about investing in crypto?” question quite a few times. I always answered with this question: “Can you explain to me what a cyptocurrency is and what gives it value?”. None could. And then I followed up with this question: “So why do you think handing your money over to people you don’t know to invest in something you don’t understand is a good idea?”. Never got an answer to that one either.
Most went on to invest, and without exception, those that did lost money.
Dennis
My favourite insight on Crypto came from a semi-retired accountant in Ely:
‘What’s clear is there’s a large amount of wealth here and it needs to be taxed’
Voting for these nitwits is clearly a bigger gamble.
Yet some busybody on the council investing in retail parks or Scottish governments investing in ferries or high speed railways or (add your own favourites…) is wise and shrewd investment.
@philip – “All investment is gambling.”
All life is gambling. The house always wins, because you only stop when you lose your life.
@BIS
Yes, trading from one cryptocurrency to another will crystallise a taxable gain or loss. That’s why you keep quiet about it.
I think we can comfortably say most people incurred a capital loss on Crypto. Most of those that didn’t and made a bundle now live in a tax haven.
@Charles, BiS
Indeed. Risk is everywhere. The coupon (%) may be fixed but the return is uncertain. Every time I cross the street my DNA degrades just that little bit more.
Wait a moment… Are they telling Brits, of all people, that they shouldn’t bet?
That’s flying bacon territory…
“Wait a moment… Are they telling Brits, of all people, that they shouldn’t bet?
That’s flying bacon territory…”
No, they’re saying ‘Don’t buy the other guy’s imaginary currency thats backed by absolutely nothing, buy ours instead!’
KyleT said:
“Yes, trading from one cryptocurrency to another will crystallise a taxable gain or loss. That’s why you keep quiet about it.”
Don’t think so. I haven’t checked yet, but I’m told that HMRC have recently released something saying that crypto to crypto trading will not be taxed – you’ll only be taxed when you cash out.
@RichardT I think this may just be a consultation on lending and staking crypto assets. At the moment, any conversion of a cryptocurrency to another cryptocurrency is a taxable event and probably likely to remain so in most cases.
What Greenbank said. Even staking triggers a disposal. Lots and lots of unwittting, ignorant crypto investors are facing huge dry tax charges.
Indeed. HMRC have a section on their website.
“You might need to pay Capital Gains Tax when you:
sell your tokens
exchange your tokens for a different type of cryptoasset
use your tokens to pay for goods or services
give away your tokens to another person (unless it’s a gift to your spouse or civil partner)”