Genesis receives heavy fine of $8 million from New York regulators and faces suspension of BitLicense for failing compliance inspection.
The bankrupt company Genesis Global Trading has been fined $8 million by the New York State Department of Financial Services (NYDFS) as part of a settlement reached after a thorough investigation. The NYDFS investigation revealed vulnerabilities in the company’s internet security and regulatory compliance.
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Genesis suspends New York operations and surrenders license
Regulatory violations and compliance failures
In-depth analysis of the misconduct
DCG plans to address legal challenges
Genesis Global Trading, a subsidiary of Digital Currency Group, has agreed to a significant settlement with NYDFS. Under the agreement, the company will temporarily suspend its operations in the state of New York and relinquish its BitLicense, a crucial license for conducting virtual currency activities in the state.
The NYDFS enforcement action stems from Genesis’s failure to comply with strict anti-money laundering regulations and maintain robust internet security measures. This non-compliance not only made the company vulnerable to illegal activities but also posed significant threats to its customers. Adrienne A. Harris, the superintendent of NYDFS, emphasized the seriousness of this situation, highlighting Genesis’s disregard for regulatory standards and the resulting potential exposure to risks.
NYDFS conducted a thorough investigation into Genesis, uncovering a series of compliance issues within the company. Particularly, the company exhibited deficiencies in anti-money laundering compliance, suspicious activity reporting, and internet security. A network security risk assessment completed in December 2022 was deemed delayed and insufficiently comprehensive, as the regulatory agency believed it failed to identify critical areas for improvement or plans to enhance the company’s network security framework, leading to this punitive action.
Sources indicate that DCG is planning to file a motion to dismiss the lawsuit brought by NYDFS. This lawsuit targets Gemini Trust Company, Genesis Global Capital, LLC, and their affiliates, accusing them of defrauding New York investors of over $1 billion. The latest settlement with NYDFS adds a new variable to the company’s litigation.
As Genesis Global Trading restructures its operations, the entire industry closely watches how this will shape the future of cryptocurrency regulation and enforcement.
DCG
Gemini
Genesis
NYDFS
Further reading:
The Fusion and Innovation of AI and the Cryptocurrency Industry in 2024: Enhancing Privacy and Data Ownership
Google Introduces the Powerful AI Gemini, Capable of Being an Adviser, Tutor, and Assistant.
