In a document released Thursday, the U.K. Government rejected plans by lawmakers to regulate crypto as gambling. It said its existing proposals addressed the risks posed in events like the FTX crash.

The House of Commons Treasury Committee expressed concerns in May that the government’s plans to apply regulations broadly similar to those of traditional finance to the crypto sector treats the sector too leniently. This creates a halo-effect that leads people to believe that investing in bitcoin (BTC), or ether (ETH), is safe.

Treasury’s response stated that “the Government strongly disagrees with Committee’s recommendations” regarding retail crypto trading.

The government said that a system of gambling regulations alone would not be able to correct issues such as the alleged commingling or customer funds at crypto exchange FTX. It also added that a system of gambling regulation in isolation is unlikely to solve problems related to insider trading, market manipulation, and other financial issues covered by traditional regulation.

The government stated that relying on gambling regulations would be a departure from its intended approach, which is based on recommendations made by global standard-setting organizations. Citing recommendations from the Financial Stability Board, recently endorsed and backed by the finance ministers of the 20 largest economies in the world, the government warned that divergence could push crypto to the offshore.

The sector warned that the U.K.’s regulation is lagging behind other jurisdictions like the European Union.

Read more about UK Lawmaker Group Fights Treasury over Treating Unbacked Crypto As Gambling

Sandali Handagama is the editor.