Genesis Global Trading, a subsidiary of Digital Currency Group (DCG), has agreed to a settlement with the New York Department of Financial Services (NYDFS) on January 12th. The settlement includes an $8 million penalty, following an agency investigation that uncovered significant shortcomings in the company’s anti-money laundering and cybersecurity programs. The NYDFS stated that these compliance failures left the company susceptible to illicit activities and cybersecurity threats.
Genesis Global Trading, Inc. and Genesis Global Capital, LLC are separate entities. Only Genesis Global Trading, Inc. holds a license from the NYDFS and was not involved in the Gemini Earn program. Regular inspections and a subsequent enforcement inquiry revealed that Genesis Global Trading did not meet the required standards in Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance, transaction monitoring, filing Suspicious Activity Reports (SAR), conducting Office of Foreign Assets Control (OFAC) screening, and maintaining cybersecurity.
As part of the settlement agreement, Genesis Global Trading will surrender its BitLicense and is in the process of closing its operations. Superintendent Adrienne A. Harris commented on the situation, stating that the company’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.
Under Superintendent Harris, the DFS has initiated its first supervisory and enforcement measures targeting crypto firms. The DFS was the first regulator globally to take action against Binance. It ordered Paxos to cease minting the BUSD stablecoin and negotiated one of the largest digital asset settlements in the world with Coinbase. Harris noted that Coinbase’s compliance shortcomings had left the platform vulnerable to severe criminal activities, including but not limited to fraud, potential money laundering, suspected involvement in child sexual abuse material, and potential narcotics trafficking.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | |
| Sentiment | negative |
| Relevance Score | 1 |
| People | Adrienne A. Harris |
| Companies | Genesis Global Trading, LLC, Coinbase, Genesis Global Capital, Binance, New York Department of Financial Services, Digital Currency Group, Paxos |
| Currencies | None |
| Securities | None |
