Gemini's Compliance with UK's Crypto Travel Rule Sparks Concerns Over Over-Regulation
Summary:
Crypto exchange Gemini plans to incorporate new restrictive measures in the United Kingdom to comply with the controversial Travel Rule. In response, Bitcoin analyst at Trezor, Josef Teteka, argues that this move signifies an alarming move towards over-regulation and may curb customers' ability to self-custody their assets. Since November 17, Gemini has been implementing restrictions on outbound crypto transactions to a group of 58 virtual asset service providers, and similar limits will be extended to incoming transfers from non-TRUST VASPs starting in December.
In a recent announcement, crypto exchange Gemini expressed its intention to conform to the contentious Travel Rule in the United Kingdom, drawing criticism from a Trezor analyst who claimed that this move symbolizes an alarming drift toward over-regulation, likely to curb the rights of users to self-custody. On 7th November, Gemini stated its plan to limit outbound cryptocurrency transactions to a group of 58 virtual asset service providers (VASPs) listed under the umbrella of the Travel Rule Universal Solution Technology (TRUST). This regulation will be enforced starting 17th November.
Josef Teteka, a Bitcoin analyst at Trezor, expressed his reservations to Cointelegraph, stating that these new regulations will only constrain those wishing to self-custody their crypto, making it increasingly challenging. The proposed restrictions would require users to provide their names, beneficiaries' names, and possibly their addresses, conflicting with the core principles of Bitcoin that emphasize user freedom, required privacy, and ultimate self-sovereignty, he explained.
Gemini also mentioned that these UK limitations will be extended to incoming transfers from non-TRUST VASPs starting December, with the crypto exchange hinting at freezing or curtailing accounts attempting such inbound transfers. Teteka asserted that this situation embodies a distressing trend of rising over-regulation, risking undue control over citizens and their financial decisions about the storage, spending, and transfer of their assets. He added that crypto exchanges in this setup could end up controlling their users' digital assets, potentially leading to disastrous consequences.
The Financial Action Task Force of the United Nations created the Travel Rule in June 2019. This set of global standards requires VASPs and other financial bodies to disseminate information about the senders and receivers of virtual assets, aiming to hinder the misuse of cryptocurrencies for illegal activities. UK legislation came into effect in September 2022, beginning the enforcement of the Travel Rule. Among the 58 non-restricted VASPs able to transact with Gemini UK users are Binance US, Coinbase, Circle, Fidelity Digital Assets, Kraken, and PayPal.
Published At
11/9/2023 12:34:38 AM
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