LONDON, July 20 Reuters Treating cryptoassets as a form of gambling would put Britain at odds with global and European Union regulators and fail to mitigate risks from the sector, Britain39;s Financial Services Minister Andrew Griffith said on Thursday.

Parliament39;s Treasury Select Committee said in a report in May that bitcoin, ether and other unbacked cryptocurrencies should be regulated as gambling given the significant risks they pose to consumers.

Lawmakers worry that treating the sector as a financial service would lead to consumers thinking it is safer than it is, with UK regulators warning investors they can lose all their money.

Britain wants to become a global hub for crypto and its related blockchain technology, and is already working on rules for the sector.

The finance ministry firmly disagrees with the recommendation to regulate retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service, Griffith told the committee in a response to its report.

A system of gambling regulation would likely not address risks highlighted by the collapse of FTX, a crypto exchange, Griffith said.

It would also run completely counter to globally agreed recommendations from global standardsetting bodies, including the International Organization of Securities Commissions IOSCO and the G20 Financial Stability Board FSB with input from domestic regulators, he added.

IOSCO proposed the world39;s first set of rules for the…