Cryptocurrency firm Genesis Global Trading has reached an agreement with the New York Department of Financial Services (NYDFS), resulting in the cessation of its operations within the state.
This development, disclosed on January 12, involves Genesis agreeing to pay an $8-million penalty to the NYDFS and the surrender of its BitLicense, a license the company had held since 2018.
The settlement stems from an investigation conducted by New York authorities, which unveiled significant deficiencies in Genesis’ Anti-Money Laundering (AML) and cybersecurity programs.
NYDFS Superintendent Adrienne Harris expressed concern over Genesis Global Trading’s lack of a functional compliance program, asserting that it demonstrated a disregard for regulatory requirements and potentially exposed both the company and its customers to security threats.
It’s important to note that this settlement exclusively pertains to Genesis Global Trading, and it is not associated with Genesis Global Capital.
In a separate legal matter, New York’s attorney general had filed a lawsuit against Genesis Global Capital, Gemini, and Digital Currency Group in October.
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This lawsuit alleged that the companies had engaged in fraudulent activities through the Gemini Earn program, targeting investors.
Genesis Global Trading, however, did not follow its parent company’s path of filing for Chapter 11 bankruptcy protection in January 2023.
A spokesperson for the firm confirmed that Genesis Global Trading had ceased its operations in September 2023 and had taken substantial corrective measures to address the concerns raised by the NYDFS.
This settlement is part of a broader context in which concerns have been raised regarding the oversight of BitLicense applicants by the NYDFS. Since 2015, cryptocurrency firms operating within New York have been required to obtain a BitLicense from the regulatory authority.
The Genesis Global Trading case underscores the NYDFS’s commitment to enforcing regulatory compliance and maintaining the integrity of the cryptocurrency market in the state of New York.
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