Gemini’s decision to pull back from the United Kingdom, European Union, and Australia to concentrate on the United States and Singapore has intensified scrutiny over whether the UK’s still-unfinished crypto rulebook is discouraging even the well-regulated firms policymakers had hoped to attract.
Back in April 2022, then-Chancellor Rishi Sunak said it was his “ambition to make the UK a global hub for cryptoasset technology,” rolling out Treasury initiatives such as stablecoin regulation and launching the Financial Conduct Authority’s (FCA) “CryptoSprint” to encourage firms to invest in the country.
In its latest strategy update on Feb. 5, however, Gemini said many overseas markets had proven “hard to win,” with global expansion leaving the exchange “stretched thin” and weighed down by organizational complexity that pushed costs higher.
Why Gemini’s exit stings for UK policymakers
Susie Violet Ward, CEO of Bitcoin Policy UK, said the move underscores how prolonged rulemaking, overlapping regulatory frameworks, and high compliance costs relative to market size are deterring companies from building a local presence. This is happening even as the FCA works toward a prudential regime for crypto asset firms similar to the EU’s Markets in Crypto-Assets (MiCA) framework.
Ward told Cointelegraph that when regulation remains in flux and compliance costs outweigh the immediate opportunity, companies are far less willing to commit capital, hire staff, and scale operations. “Capital goes where it can operate with clarity and confidence,” she said, adding that Gemini’s pullback reflects that reality.
She also noted that UK crypto firms are currently operating under a “patchwork” of anti–money laundering (AML) registration requirements, financial promotions restrictions, and interim guidance, while the full regulatory framework remains “years away.” This, she argued, makes the UK less attractive than jurisdictions offering clearer and more predictable rules.
Friction in the UK framework
Laura Navaratnam, head of UK policy at the Crypto Council for Innovation, said Gemini’s exit will inevitably be “a blow for policymakers” as they work to finalize the new regime ahead of licensing applications opening in September. As one of the first firms to secure FCA registration in 2020, Gemini’s departure sends an uncomfortable signal.
Under the draft proposals, crypto firms serving UK customers will need to apply for full FCA authorization during a five-month “gateway” period running from Sept. 30, 2026, to Feb. 28, 2027, ahead of the new prudential regime taking effect in October 2027.
Navaratnam added that key elements of the framework remain unresolved, particularly how the FCA’s stablecoin rules will interact with the Bank of England’s systemic regime. She warned that these differing approaches could create a regulatory “cliff edge” for firms transitioning between regimes and potentially trigger further market exits if left unaddressed.
CoinJar CEO Asher Tan told Cointelegraph that the UK’s move from a limited AML-registration model to full authorization under the Financial Services and Markets Act (FSMA) is “materially increasing the operational burden” for exchanges seeking to serve UK users.
Ward also argued that the UK risks striking the wrong balance by failing to clearly distinguish between Bitcoin and other crypto assets and by not providing timely, actionable guidance. She pointed to surveys showing that bank account closures and refusals are common among UK crypto firms, significantly raising the likelihood that businesses choose to leave.
FCA’s next steps and signs of resilience
Industry retrenchment is not unique to the UK. Global players such as Coinbase have exited certain markets, including Argentina, when local conditions and strategic priorities no longer justified the operational complexity.
The FCA is currently consulting on CP25/42, a proposed prudential framework that would extend its oversight to crypto trading platforms, staking, and dealing activities. The proposal would introduce capital and liquidity requirements across the sector as part of a broader consultation package, which closes on Thursday.
The new regime is expected to take effect on Oct. 25, 2027, following the authorization gateway period.
Tan said the “direction of travel is clear.” Firms that want to continue operating in the UK will need to commit significant resources to meet the new requirements, and many are now weighing those costs against the size of the opportunity.
