Gemini’s recent announcement of measures to comply with the UK’s Travel Rule has been met with criticism from a Trezor analyst. The analyst claims this will strip customers of their freedom for self-custody and is an example of “overregulation”.
Starting November 17th, Gemini will restrict outward cryptocurrency transfers to a list of 58 registered virtual asset service providers (VASPs) under the Travel Rule Universal Solution Technology (TRUST). Josef Teteka, a Bitcoin analyst from Trezor, suggested that this move will make it much more difficult to move assets into self-custody. He said this goes against the principles of Bitcoin, which should allow users to enjoy freedom, privacy, and self-sovereignty.
In December, Gemini will also apply the same restrictions to incoming transfers from non-TRUST VASPs. If such transfers are attempted, Gemini may freeze or limit the accounts involved.
Teteka believes this situation shows a “worrying creep towards over-regulation” which could lead to the control of everyday citizens and the choices they make when it comes to saving, spending, and transferring their assets. He also pointed out that crypto exchanges can assume control and ownership of digital assets, a situation that can have disastrous consequences.
Several X (formerly Twitter) users also shared negative reactions to the announcement. One user wrote that many have the misconception that the only way to acquire Bitcoin is through exchanges, which is far from the truth.
The Travel Rule was created by the United Nations Financial Action Task Force in June 2019. It is a set of global standards that requires VASPs and other financial institutions to share information about virtual asset senders and recipients. Its goal is to make it more difficult for criminals to use cryptocurrencies for illegal activity.
In July 2022, the UK passed a bill to start enforcing the Travel Rule, which came into effect in September. Among the VASPs that are not restricted from transacting with Gemini UK users are Binance US, Coinbase, Circle, Fidelity Digital Assets, Kraken, and PayPal.