Cryptocurrency firm Genesis Global Trading has agreed to settle with the New York Department of Financial Services (NYDFS), surrendering its ability to conduct operations in the state.
According to a Jan. 12 announcement, Genesis agreed to pay an $8-million penalty to the NYDFS, cease operations in New York, and surrender its BitLicense, which the firm had held since 2018. The settlement followed an investigation in which New York authorities discovered “significant failings” in Genesis’ Anti-Money Laundering and cybersecurity programs.
“Genesis Global Trading’s failure to maintain a functional compliance program demonstrated a disregard for the Department’s regulatory requirements and exposed the company and its customers to potential threats,” said NYDFS Superintendent Adrienne Harris.
NEW: Superintendent Adrienne A. Harris Announces $8 Million Penalty Against Genesis Global Trading, Inc. After DFS Investigation Finds Significant Failings in Anti-Money Laundering and Cybersecurity Programs
— NYDFS (@NYDFS) January 12, 2024
More here: https://t.co/lVY2TfitRr pic.twitter.com/eiyYsgrWUY
Related: New York financial regulator tightens crypto listing guidance
The NYDFS specified in the announcement that the settlement affected Genesis Global Trading, a separate entity from Genesis Global Capital. In October, New York’s attorney general filed a lawsuit against Genesis Global Capital, Gemini and Digital Currency Group for allegedly defrauding investors through the Gemini Earn program. Genesis Global Trading was also not included in its parent company filing for Chapter 11 bankruptcy protection in January 2023.
The settlement followed concerns voiced by New York’s Office of the Comptroller over the management of NYDFS’ BitLicense applicants. Crypto firms operating in the state have been required to apply for a BitLicense through the regulator since 2015.
Magazine: US enforcement agencies are turning up the heat on crypto-related crime