Cryptocurrency exchange Gemini recently made the decision to limit cryptocurrency transfers exclusively to Travel Rule Universal Solution Technology (TRUST)-registered Virtual Asset Service Providers (VASPs) in the U.K. This move comes as a result of the Travel Rule regulations, which require VASPs to share sender and receiver information for crypto transactions. Gemini partnered with TRUST to meet these requirements and ensure compliance.
The Travel Rule regulations in the United Kingdom apply to all cryptocurrency transactions, making it necessary for VASPs to share data such as sender and recipient names and crypto addresses. Each transaction’s risk profile determines the specific information required. Compliance with these regulations presents challenges for cryptocurrency exchanges like Gemini, as they must find ways to share this information securely and efficiently.
To address the compliance challenges posed by the Travel Rule regulations, Gemini partnered with TRUST, an industry-driven solution that facilitates information sharing and combats fraudulent activities in the crypto industry. By utilizing TRUST’s platform, Gemini can securely share the required sender and receiver information with other registered VASPs, ensuring transparency and compliance with the regulations.
As part of its compliance efforts, Gemini will restrict outgoing Bitcoin and other cryptocurrency transfers to only 58 registered crypto-related companies. These companies include well-known names in the industry, such as Anchorage, Binance.US, BitGet, BitGo, Coinbase, and Circle. By limiting transfers to TRUST-registered VASPs, Gemini aims to maintain compliance and ensure that all necessary information is provided for each transaction.
Gemini’s compliance measures will also extend to incoming transfers. By December, the exchange plans to restrict inbound transfers from non-TRUST VASPs. Transactions from these VASPs may lack the required information, making them potentially non-transparent and non-compliant. Gemini’s decision to freeze or restrict users attempting these transfers demonstrates its commitment to upholding the transparency and regulatory standards set by the U.K. government.
Gemini’s actions align with the United Kingdom’s efforts to establish a regulatory framework for the digital asset industry. Recent developments include the introduction of a financial promotions regime and the passage of a bill that grants law enforcement agencies the authority to seize crypto assets involved in illicit activities. In response to these regulations, Gemini has made operational changes such as establishing dedicated social media channels for U.K. customers and introducing risk warnings on its platform.
Gemini’s decision to limit cryptocurrency transfers exclusively to TRUST-registered VASPs in the U.K. demonstrates its commitment to compliance with the Travel Rule regulations. By partnering with TRUST and implementing restrictions on outgoing and incoming transfers, the exchange ensures transparency and upholds regulatory standards. As the U.K.’s regulatory landscape continues to evolve, cryptocurrency exchanges will need to adapt and find innovative solutions to meet compliance obligations while serving their customers effectively.