A castle in Scotland. A villa in Mallorca. A chalet in Switzerland. Enjoy the crypto markets a bit too much, and these are some of the newly cropped up luxury crypto rehab centers where you could land.
If you can still afford it.
Abdullah Boulad, who runs a set of luxury crypto rehab centers in Mallorca, Switzerland and London for “addicts,” is part of a growing number of health care professionals, lawyers and policy experts who say that crypto trading is more akin to gambling than it is to other financial instruments.
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It’s the immediate payoff and the constant availability of the markets that make it distinct from trading, say, securities. At the end of the day and during the weekend, trading floors close, and retail investors can’t spend all day and night feeding the rush of making or losing money.
“Crypto is something you have 24/7,” Boulad said. “You don’t put it away. So it’s like you’re playing a casino in your pocket”
Boulad said the way to address a crypto addiction is not far off from that of a gambling addiction. Crypto trading can tap the same reward-and-adrenaline centers in the brain, he said, so the treatment options are similar.
“It’s also very fast-paced. You can lose a lot and you can gain a lot,” he said. “You can make a real change in your life and gain, or lose, a lot of money.”
Mental health professionals aren’t the only ones who see the similarities between crypto trading and gambling.
Todd Baker, a senior fellow at the Richman Center for Business, Law & Public Policy at Columbia University and the managing principal of Broadmoor Consulting, has argued that crypto trading shouldn’t be legitimized by traditional financial institutions, or through financial regulation. Instead, he said that crypto is a closed loop, where investing in certain coins isn’t actually funding, say, a company that is, in turn, creating products, services or productivity.
“Is crypto trading finance?” he said. “Unless it’s converting money into useful investment, it’s not really financial services.”
And just like banks don’t hold casino chips, Baker said that traditional financial institutions should be entirely separate from holding, financing or trading cryptocurrency.
“The critical part would be keeping real money out of the system,” he said. “From that perspective, I wouldn’t want banks providing leverage, and I wouldn’t want securities markets turning these things into more traditional financial vehicles.”
While there’s little chance that regulators and lawmakers would, suddenly, abandon the idea that crypto should be regulated by financial agencies, Baker said the idea that crypto trading and gambling are strikingly similar has a lot of traction in Washington, if only in private conversations. That trickles over into the idea that regulators, such as the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp., should insulate the banking system from the volatility of crypto markets.
Regulating crypto as if it were gambling, rather than as a financial instrument, would set off a wave of impactful changes, said Will Bunting, an assistant professor at Stetson Law, whose paper “A Better Legal Definition of Gambling: With Applications to Synthetic Financial Instruments and Cryptocurrency” is forthcoming in the journal Albany Law Review.
In an extreme case, local jurisdictions could limit crypto trading, just as Utah and Hawaii still prohibit gambling facilities. More realistically, regulators could restrict access, putting up limits on what time people were allowed to trade crypto, or limiting it to certain physical locations, like a casino.
“In gambling, you can prevent certain people from participating and you can restrict access,” Bunting said. “Like, should people be able to access a slot machine when they’re drunk at 2 a.m.? In some cases, you even have to go to a physical casino, which is an additional control.”
And regulators could more easily govern how and when people trade crypto on credit. Some casinos, for example, don’t allow people to gamble using their credit cards, and there are rules that require gamblers to have the ability to repay what they wager. Crypto trading could adopt similar restrictions.
“Bookmakers tend to have to balance both sides, which is another form of risk mitigation,” Bunting said. “If I’m just allowed to promise that I’m good for it, then you get into Tony Soprano breaking the knees.”
