Crypto News: Gemini Exit Exposes UK Rulebook Gaps as Europe Tightens Sanctions

Key Insights:

• In recent crypto news, Gemini’s exit highlights how unclear UK crypto rules are, deterring even well-regulated exchanges from committing capital.
• The EU’s proposed sanctions package is aimed at Keremet Bank and Capital Bank of Central Asia, based on the allegations of crypto-linked Russia transactions
• Regulatory clarity is becoming a competitive advantage as jurisdictions tighten oversight and firms consolidate operations.

The decision by Gemini to exit from the United Kingdom, the European Union, and Australia has reopened debate over regulatory clarity in recent crypto news. Policymakers once promised that the UK would become a global crypto hub. That ambition now comes under new scrutiny as firms re-evaluate the cost of compliance and geopolitical risk.

Crypto News: UK Crypto Ambitions Meet Regulatory Friction

Gemini’s strategy update confirmed a sharper focus on the United States and Singapore. The exchange said overseas markets proved to be difficult to win. Expansion resulted in operations that were stretched, complex, and costly.

In April 2022, the then-chancellor Rishi Sunak pledged to make the UK a leader in crypto assets. Treasury plans included stablecoin rules and an FCA-led CryptoSprint.

Progress has been slower than many firms had expected. Notably, industry voices say long-term transitions discourage long-term commitments. Capital prefers certainty, predictable timelines, and proportional compliance burdens.

Susie Violet Ward of Bitcoin Policy UK says the UK is still stuck in limbo. Firms have overlapping regimes and high costs for the size of the market. She said this combination demoralizes and slows investment decisions.

Compliance Costs and the Patchwork Problem

UK crypto firms currently encounter fragmented requirements. These include AML registration, strict rules around financial promotions, and the interim guidance. A comprehensive prudential setup is still years away.

Ward said this patchwork increases operational risk. Businesses struggle to hire, scale, or bank reliably. Surveys indicate common account closures and denials, which create more exit risks.

Laura Navaratnam of the Crypto Council for Innovation echoed similar concerns. She said Gemini’s departure will sting policymakers. The exit comes as the FCA prepares for a new authorization gateway.

Under draft rules, the firms are required to apply between September 2026 and February 2027. The regime would have its full launch in October 2027. Key details are unresolved, in particular, stablecoin oversight. Navaratnam warned of a possible cliff edge. Firms face conflicting demands between the FCA rules and the Bank of England’s systemic framework. Without alignment, more withdrawals could follow.

Europe’s Sanctions Push Increases New Crypto Risks

While the UK debates its rulebook, the European Union is tightening enforcement elsewhere. Brussels is preparing a 20th sanctions package against Russia-linked financial flows. The focus is now on third countries.

Two banks in Kyrgyzstan, Keremet Bank and Capital Bank of Central Asia, are under investigation. EU officials accuse them of processing crypto-linked transactions for Russia. Banks in Tajikistan and Laos are also at risk of being blacklisted.

If sanctioned, these institutions would be cut off from the EU financial systems. The package also prohibits exports of sensitive equipment to Kyrgyzstan. Officials want to curb sanctions circumvention.

Crypto platforms are explicitly mentioned. Authorities are investigating stablecoin issuers and the digital ruble infrastructure. This is a sign for stiffer oversight for cross-border crypto rails. The EU is also expanding asset freezes and travel bans. Another 30 individuals and over 60 companies might be added to the list. The approach signals a move toward aggressive enforcement.

Strategy Reset in a Fragmented Global Market

Industry retrenchment is not unique to Gemini. Coinbase and others have left markets when the costs no longer justified them. Firms are now balancing opportunity with regulatory and geopolitical exposure.

CoinJar CEO Asher Tan said the UK’s move to full FSMA authorization increases the operational lift. Exchanges are forced to commit significant resources just to stay. Many are reevaluating that equation.

At the same time, Europe’s sanctions posture provides another layer of risk. There is increased scrutiny on crypto firms when they operate near sanctioned areas. Compliance failures have geopolitical ramifications now.

Jurisdictions with clarity and speed attract capital. Those with long transitions run the risk of losing regulated players. Gemini’s exit and the EU’s sanction drive illustrate the same lesson.

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