The crackdown on cryptocurrency escalated today as lawmakers called for consumer commerce to be regulated like gambling.

In a new report from a cross-party committee, British politicians claimed Bitcoin and Ether have “no intrinsic value” and serve “no useful social purpose”.

They also noted several adverse effects of cryptocurrencies. In particular, they pointed to the enormous energy consumption, the risk to consumer traders and the criminal use in swindling, fraud and money laundering.

‘Effective regulation is clearly needed.

Because of the public risks, the commission warned against regulating trading as a financial service – which the UK government has proposed.

“Effective regulation is clearly needed to protect consumers from harm and support productive innovation in UK financial services,” said committee chair Harriett Baldwin.

“However, with no intrinsic value, massive price volatility, and no discernible social good, the consumer trade in cryptocurrencies like Bitcoin is more like gambling than a financial service, and should be regulated as such. By betting on these unsecured tokens, consumers should be aware that all of their money could be lost.”

Unsurprisingly, the comments have caused an uproar in the crypto community. CryptoUK, an industry lobby group, was particularly offended by the comparison to gambling.

“Professional investment managers see Bitcoin and other crypto assets as a new alternative investment class — not as a form of gambling — and institutional acceptance of unbacked cryptocurrency assets has increased significantly,” said Ian Taylor, board advisor at CryptoUK.

“In addition, gambling is exempt from capital gains tax. Does the government really want to exclude tens of millions of pounds of tax revenue from profits made by buying and selling unsecured cryptocurrency assets?”

“Crypto has been crucial for people without a bank account.

Taylor further criticized lawmakers for overlooking evidence submitted by CryptoUK. He argued that they had neglected industry steps to track, monitor and report, efforts to reduce analytics fraud, and commitments to work closely with regulators and law enforcement.

In addition, he disputed claims that cryptocurrencies had no useful social purposes.

“cryptocurrency has been pivotal in serving the unbanked as a force for good, making secure and efficient peer-to-peer payments available to the most vulnerable in our society,” he said.Also, the report makes no mention of tokenization of financial products, which we specifically highlighted in the evidence session as a key benefit of the technology.

“The ability to represent financial products such as bonds and stocks on a blockchain brings numerous benefits. These include faster settlement times, fewer intermediaries and therefore cost savings, new market access, increased liquidity and automation through smart contract technology.”

However, his arguments come at a difficult time for the industry. Trust cryptocurrencies is battered due to market turmoil, the FTX scandaland the collapse of “stablecoin” terra. In response, governments around the world are pushing for further regulation of the sector.

As is so often the case with technical legislation, the EU is leading the way. In April the European Parliament approved the world’s first comprehensive set of rules for crypto assets.

In the UK, the election of a pro-crypto prime minister has meanwhile taken place aroused hope that the country will become a global hub for the industry. But the new commission report shows that such goals are met with strong opposition.