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Crypto exchange Gemini newly announced measures to comply with the controversial crypto Travel Rule in the United Kingdom reflects a “worrying creep” toward overregulation and will strip customers of their freedom for self-custody, according to a Trezor analyst.
On Nov. 7, cryptocurrency exchange Gemini announced it has made changes in order to comply with the new Travel Rule restrictions for customers in the U.K.
Gemini said it will restrict outward cryptocurrency transfers to a list of 58 virtual asset service providers (VASPs) registered under the Travel Rule Universal Solution Technology (TRUST) starting on Nov. 17.
Speaking to Cointelegraph, Trezor Bitcoin analyst Josef Teteka said the move will only serve to limit the options for those looking to self custody their crypto.
“The forthcoming restrictions from Gemini UK will make it much harder for Bitcoin and other cryptocurrency users to move their assets into self custody,” said Tetek, noting that the requirements include providing one’s name, name of beneficiary and in some cases, their address.
“This goes against the fundamental principles of Bitcoin, where the user rightly enjoys freedom, privacy where required, and ultimately self-sovereignty.”
This is dog
Email just received from @Gemini
“Travel Rule: Changes to crypto transfer requirements for UK customers”
global hub for cryptoassets my a**, Rishi!
(I barely use Gemini Anyways but still ♂️) pic.twitter.com/tuqhSLyZgg
— Robin Nakamoto (@RobinNakamoto) November 3, 2023
Gemini said its UK restrictions will also apply to incoming transfers from non-TRUST VASPs starting in December, with Gemini stating it may freeze or limit accounts attempting to make inbound transfers.
Tetek said the case at hand represents a “worrying creep towards over-regulation” which could result in the “control of its everyday citizens and the choices they make” around how they save, spend and transfer their assets. He added:
“As we’ve seen again and again, crypto exchanges can and do assume control and ownership of their user’s digital assets, a situation that can end in disaster. Why should they now also be the arbiters of transactional freedom?”
Several X (formerly Twitter) also expressed negative sentiment on the recent Gemini announcement.
Many people have the misconception that the only way to acquire Bitcoin is by buying it on exchanges. This belief is far from the truth. There are countless alternative ways to obtain Bitcoin, such as mining, earning it through services or products, and even P2P transactions.
— rare ☠️ passenger.gfm (@rarepassenger) November 7, 2023
The Travel Rule was created by the United Nations agency Financial Action Task Force in June 2019.
It is a set of global standards that mandates VASPs and other financial institutions to share information about the senders and recipients of virtual assets. Its objective is to make it more difficult for criminals to use cryptocurrencies for illicit activity.
The U.K. passed legislation to begin enforcing the Travel Rule in July 2022 which came into effect in September.
Among the 58 VASPs not restricted to transact with Gemini U.K. users include Binance US, Coinbase, Circle, Fidelity Digital Assets, Kraken and PayPal.