UK Crypto Hub Vision Faces Test After Gemini Retreat

Gemini’s exit is testing the UK’s ambition to become a global crypto hub, with industry groups warning that slow, overlapping regulations and high compliance costs are pushing firms to jurisdictions that offer clearer and more predictable frameworks.

Gemini’s retreat puts UK crypto hub ambitions under fresh scrutiny

Gemini’s decision to pull back from the United Kingdom, alongside exits from the European Union and Australia, is reigniting debate over whether the UK’s regulatory approach is pushing away the very firms policymakers hoped to attract. The exchange said it is narrowing its focus to the United States and Singapore, citing the rising cost and complexity of operating across multiple jurisdictions.

The move contrasts with the UK government’s long-stated ambition to position the country as a global center for crypto innovation. That vision was laid out in 2022, when then-Chancellor Rishi Sunak pledged to make the UK a hub for cryptoasset technology, backed by plans for stablecoin regulation and closer engagement between regulators and industry.

Why Gemini’s exit matters for the UK

Industry observers say Gemini’s retrenchment highlights a growing gap between ambition and execution. Susie Violet Ward, CEO of Bitcoin Policy UK, said prolonged rulemaking, overlapping regulatory regimes and high compliance costs relative to market size are discouraging firms from committing capital and building local operations.

She noted that many UK crypto businesses are still operating under a transitional framework that combines Anti-Money Laundering registration, strict financial promotions rules and interim guidance, with the full regulatory regime still years from completion. That uncertainty, Ward said, makes it harder for companies to hire, invest and scale with confidence.

Gemini strategy update: Source Gemini

Regulatory friction and unresolved gaps

Laura Navaratnam, head of UK policy at the Crypto Council for Innovation, described Gemini’s exit as a setback for policymakers working to finalize the new framework before licensing applications open. Under current proposals, crypto firms serving UK customers would need to apply for full Financial Conduct Authority authorization during a short window in late 2026, ahead of the prudential regime taking effect in 2027.

Navaratnam warned that key issues remain unresolved, particularly the interaction between the FCA’s stablecoin rules and the Bank of England’s approach to systemically important firms. Without clearer coordination, she said, companies could face abrupt regulatory transitions that encourage further withdrawals.

CoinJar CEO Asher Tan added that the shift from a limited AML registration model to full Financial Services and Markets Act authorization significantly raises the operational burden for exchanges. Ward also pointed to persistent banking access issues and a lack of clear differentiation between Bitcoin and other crypto assets as factors increasing the likelihood of firms leaving the UK.

FCA presses ahead as firms reassess commitments

UK regulators argue that retrenchment by global players is not unique to Britain, noting that exchanges such as Coinbase have also exited other markets when conditions no longer aligned with strategic priorities. The FCA is now consulting on a new prudential regime that would extend capital, liquidity and governance requirements to crypto trading, staking and dealing activities, with final rules expected to take effect in 2027.

While the direction of regulation is becoming clearer, industry leaders say companies must now weigh the cost of compliance against the size of the UK opportunity. For some, Gemini included, that calculation appears to be tipping the balance elsewhere.

A new regime for cryptoasset regulation. Source: FCA