Gemini’s recent announcement regarding its compliance with the crypto Travel Rule in the United Kingdom has raised concerns among analysts, particularly Josef Teteka from Trezor. The move, set to take effect on November 17, involves restricting outward cryptocurrency transfers to a select list of 58 virtual asset service providers (VASPs) registered under the Travel Rule Universal Solution Technology (TRUST).
Teteka argues that these measures will impede users seeking to exercise self-custody of their crypto assets, emphasizing the importance of preserving the fundamental principles of Bitcoin—user freedom, privacy, and self-sovereignty. The requirements imposed by Gemini, including providing personal information such as name, beneficiary name, and in some cases, address, clash with the ethos of a decentralized and user-centric cryptocurrency like Bitcoin.
Gemini’s restrictions are not limited to outward transfers; they also extend to incoming transfers from non-TRUST VASPs starting in December. The exchange asserts its right to freeze or limit accounts attempting inbound transfers. Teteka views this as a worrisome trend toward overregulation, expressing concern that such measures could infringe upon the control and choices of everyday citizens in managing their assets.
The Travel Rule, established by the Financial Action Task Force in June 2019, sets global standards requiring VASPs and financial institutions to share information about the senders and recipients of virtual assets. The UK enacted legislation in July 2022 to enforce the Travel Rule, effective from September.
The list of 58 VASPs not subject to restrictions includes major players like Binance US, Coinbase, Circle, Fidelity Digital Assets, Kraken, and PayPal. Despite the aim of the Travel Rule to curb illicit activities involving cryptocurrencies, critics like Teteka argue that such regulatory steps risk undermining the core principles of decentralization and individual control inherent in the cryptocurrency space. The sentiments expressed by Teteka echo concerns among users and industry observers, highlighting the ongoing debate over striking a balance between regulatory compliance and preserving the ethos of decentralized finance.
