Genesis Global Trading resolved compliance issues with NYDFS, forfeited BitLicense and paid $8 million.

adminJanuary 13, 2024

join us telegram A channel to stay up to date on breaking news coverage

Genesis Global Trading, a subsidiary of Digital Current Group, recently reached a settlement with the New York State Department of Financial Services (NYDFS). The deal includes an $8 million fine for alleged failure to comply with virtual currency and cybersecurity regulations. These shortcomings increase the company’s vulnerability to illegal activities and cybersecurity threats.

NYDFS’ investigation, which included routine inspections and enforcement investigations, found that Genesis Global Trading failed to meet required standards in several material areas. This includes maintaining Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance, effective transaction monitoring, filing Suspicious Activity Reports (SARs), and complying with and maintaining Office of Foreign Assets Control (OFAC) screening requirements. Strong cybersecurity measures. NYDFS specifically noted that the company’s cybersecurity risk assessment was inadequate, lacked a comprehensive approach, and failed to pinpoint areas needing improvement.

It ceases operations in New York and relinquishes its BitLicense.

As part of the settlement, Genesis Global Trading must cease operations in the state and surrender its BitLicense, a prerequisite for conducting virtual currency-related activities in the state. NYDFS Superintendent Adrienne A. Harris expressed concern about the company’s neglect of maintaining a functional compliance program, which exposes both the company and its customers to potential risk.

Meanwhile, the New York State Department of Financial Services (DFS), under Superintendent Adrienne A. Harris, continues to lead the prudential regulation of virtual currencies. Under Harris, DFS has played a key role in shaping regulatory frameworks at the state level and working with global regulators, including Illinois, California, the United Kingdom, the European Union, the United Arab Emirates, and Singapore. Through the VOLT initiative led by Superintendent Harris, the DFS team has grown to over 60 professionals, strengthening licensing oversight and oversight in areas such as BSA/AML law, financial crime, data governance, and cybersecurity. DFS has also played a pivotal role in developing regulatory standards around the world, strengthening its policies and procedures.

NEW: Superintendent Adrienne A. Harris announces an $8 million fine against Genesis Global Trading, Inc. after a DFS investigation found serious deficiencies in its anti-money laundering and cybersecurity programs.
More details here: https://t.co/lVY2TfitRr pic.twitter.com/eiyYsgrWUY
— NYDFS (@NYDFS) January 12, 2024

Additionally, DFS issued eight groundbreaking regulatory guidelines that address critical issues such as USD-backed stablecoins, virtual currency insolvencies, and the use of blockchain analytics tools. Under Harris’ direction, DFS has taken decisive supervisory and enforcement action against cryptocurrency companies, negotiating key settlements and addressing compliance issues head-on, as seen in the case of Genesis Global Trading.

They defrauded investors and caused them to lose $1 billion.

Also worth noting is the New York Attorney General’s lawsuit against Genesis Global Trading, which accuses the company and its parent companies, DCG and Gemini Trust, of defrauding investors by hiding more than $1 billion in losses. Genesis Global Trading has faced numerous legal challenges over the past year, including charges from the Securities and Exchange Commission (SEC) for selling billions of dollars worth of unregistered securities. Genesis, which is currently undergoing bankruptcy proceedings, is working to recover investor funds, and DCG is reportedly planning to object to the Attorney General’s lawsuit.

NYDFS’ rigorous standards for virtual currency and cybersecurity regulations aim to protect consumers and institutions from potential threats. The $8 million fine imposed on Genesis Global Trading is a testament to NYDFS’ commitment to enforcing these standards as part of a broader effort to regulate the virtual currency industry, with fines totaling over $140 million to date. .