Genesis Global Trading, a subsidiary of influential cryptocurrency giant Digital Currency Group (DCG), has reached a settlement with the New York Department of Financial Services (DFS) that includes forfeiture of its Bitlicense, suspension of operations and payment of $8 million in fines. It was revealed. in the report luck.
New York regulators said their investigation into the company found serious deficiencies in its anti-money laundering and cybersecurity protocols.
Genesis did not immediately respond to a request for comment. decryption.
Under the terms of the settlement, Genesis Global Trading will surrender its BitLicense, New York’s unique cryptocurrency business registration, cease its New York-based operations and pay a $8 million fine.
DFS Superintendent Adrienne Harris highlighted the company’s failure to maintain a strong compliance framework and highlighted potential risks to both the company and its customers.
“Genesis Global Trading’s failure to maintain a functional compliance program disregarded the department’s regulatory requirements and exposed the company and its customers to potential threats,” Harris said. luck.
Gensis is one of the key portfolio companies that helped DCG become a key player in the US cryptocurrency industry. However, the company became embroiled in a tumultuous cryptocurrency market crash in 2022 and faced increased regulatory scrutiny, ultimately leading to bankruptcy in early 2023.
Although Genesis Global Trading was not directly involved in the bankruptcy or resulting legal problems faced by DCG, it nonetheless felt the impact of its parent company’s difficulties. For example, in September the company announced that it was shutting down its over-the-counter trading platform in the United States.
DFS’ action against Genesis Global Trading comes at a pivotal moment for cryptocurrency regulation in New York. States are at the forefront of cryptocurrency oversight in the United States, and DFS is the only regulator providing a comprehensive framework for the industry. The move follows DFS’ approval of the Gemini Earn program for the Gemini exchange, another BitLicense holder that later faced legal challenges.
This agreement reflects Genesis’ commitment to collaboration and improvement, while also marking an important moment in the ongoing debate over cryptocurrency regulation and oversight. This highlights the need for robust compliance mechanisms in the rapidly evolving and inherently risky realm of digital currencies. As regulators and industry players continue to navigate this complex landscape, the Genesis story serves as a cautionary tale and a potential blueprint for future regulatory actions.
Editor’s note: This article was created with the help of AI. Edited and fact checked by Stacy Elliott.
