- Gemini will no longer allow UK customers to send or receive crypto funds to companies not registered with TRUST, such as Binance.
- The decision has left users wondering whether transfers from self-custodial wallets were impacted.
- Experts explain how the move might play out in the UK.
Gemini’s decision to restrict UK customers’ ability to conduct cryptocurrency transactions has left users outraged and confused.
The crypto exchange announced on Tuesday that UK customers must make their payment through companies registered with TRUST, which stands for the Travel Rule Universal Solution Technology.
It’s a platform that allows crypto companies to securely share data with each other in compliance with the Travel Rule, a regulation aiming to prevent money laundering.
“The forthcoming restrictions from Gemini UK will make it much harder for Bitcoin and other cryptocurrency users to move their assets into self-custody,” Josef Tetek, a Bitcoin analyst at hardware wallet provider Trezor, told DL News.
“This goes against the fundamental principles of Bitcoin, where the user rightly enjoys freedom, privacy where required, and ultimately, self-sovereignty,” Tetek added.
The decision may also see Gemini users cut off from sending digital currency to rival exchange Binance, which has signed up to a competing Travel Rule group, Mikko Ohtamaa, CEO of DeFi trading service provider Trading Strategy, told DL News.
Trading Strategy is not affiliated with Gemini.
Gemini’s decision is the latest development on the back of stricter crypto rules introduced by the UK, with regulators and lawmakers introducing new rules this year.
Gemini indicated that the changes will snap into action on November 17. The exchange will also accept inbound transfers to TRUST companies starting December 1.
Accounts that receive funds from other sources may find their accounts frozen, Gemini said.
Consequences for users
The announcement was followed by confusion on social media, with multiple account holders on X, the social media platform formerly known as Twitter, wondering whether transactions with self-custodial wallets will be banned outright.
Self-custodial wallets are not controlled by any third party, even the company that issues them, making them a preferred crypto storage option to many.
Gemini said on its website that only transfers in BTC, ETH, and tokens native to Ethereum will be allowed with TRUST companies from November 17 onwards.
Other tokens available at Gemini will still be available for trading, and for withdrawal to self-custodial wallets.
“Whether or not Gemini and other TRUST members will tighten the deposits and withdrawals in the future is unknown,” said Ohtamaa. “As far as I understand, the law does not protect the consumer and say that they are eligible to the withdrawal of their assets.”
“What happens if you provide Gemini with the deposit address of a non-TRUST cryptocurrency exchange and report it as your own is unclear,” he added.
The TRUST Network
Coinbase launched TRUST in the US in February 2022. It has now expanded to the UK, Europe, and Singapore.
As of August, over 90 entities including Circle, Kraken, Paypal, Robinhood, Revolut, Fidelity, and Binance.US — but not global parent company Binance — were included in the initiative, according to Coinbase.
“It is unknown who can become a TRUST member, as this happens at the discretion of Coinbase,” said Ohtamaa.
Coinbase invites companies to contact them through their website if they are interested in joining the initiative.
“Membership eligibility criteria and how the TRUST network operates are not transparent. There are likely competing business interests,” said Ohtamaa. “For example, Binance is a member of a competing Travel Rule alliance member called TRISA.”
Crypto companies in the UK have been required to collect and share information about crypto transfers under the Travel Rule since September 1.
“The Travel Rule is designed to bring greater transparency to cryptoasset transfers, making it harder for criminals to use cryptoassets for illicit activity,” the Financial Conduct Authority said on its website.
“Specifically, the Travel Rule advances anti-money laundering and counter-terrorist financing efforts globally by helping cryptoasset businesses detect suspicious transactions and carry out effective sanctions screening,” the website said.
Gemini, Coinbase, Binance, Kraken and Circle did not respond to requests for comment.