Genesis Global Trading to Pay $8 Million Settlement and Exit New York

Table of Contents

• Genesis Will Pay $8 Million Fine and Surrender BitLicense
• DCG Owned Genesis Global Capital Goes Belly Up

Genesis Global Trading agreed to pay a $8 million penalty and surrender its New York Department of Financial Services license to operate after an investigation found significant compliance failings on the firm’s part. 

Crypto brokerage Genesis Global Trading, owned by DCG, will pay an $8 million fine to New York’s state financial regulator over allegedly “disregarding” the regulator’s AML and cybersecurity programs. Genesis will also relinquish its BitLicense – the license which allowed it to operate a crypto business in New York. 

Genesis Will Pay $8 Million Fine and Surrender BitLicense

Crypto brokerage firm Genesis Global Trading, a part of the now-bankrupt Genesis Global Holdco LLC, agreed to a settlement with the New York State Department of Financial Services (NYDFS). According to a press statement, under the settlement agreement terms, Genesis will pay $8 million in penalties and surrender its BitLicense, effectively ousting the firm from New York. 

“Following routine examinations and a subsequent enforcement investigation, the Department found that Genesis Global Trading failed to meet required standards in Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance, transaction monitoring, Suspicious Activity Report (SAR) filings, Office of Foreign Assets Control (OFAC) screening, and cybersecurity,” the NYDFS press statement said. 

According to the NYDFS, the firm failed to comply with its anti-money laundering (AML) and cybersecurity programs. Investigations into the firm found Genesis was unable to maintain an effective compliance program for AML. Additionally, the firm did not act according to the Bank Secrecy Act requirements, failing to file sufficient “Suspicious Activity Reports,” Reuters reports.   

“Genesis Global Trading’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,” said NYDFS Superintendent Adrienne Harris. 

The Wall Street Journal (WSJ) reports a spokesperson for the NYDFS said that entities licensed to operate in New York State “have an obligation to protect consumers and the financial system’s integrity and allowing a business to avoid punishment for violations by closing shop could lead others to take their obligations less seriously.” 

Genesis will give up its BitLicense, which it has held since 2018. Any crypto company offering certain services in New York must hold a “BitLicense.” A BitLicense mandates companies to comply with KYC, AML and capital requirements.  

DCG Owned Genesis Global Capital Goes Belly Up

Digital Currency Group (DCG) owns crypto broker Genesis Global Trading and Genesis Global Holdco and two subsidiaries – Genesis Global Capital and . Genesis Asia Pacific. Genesis Global Holdco filed for bankruptcy in 2023 in part due to the collapse of FTX and Three Arrows Capital. According to the WSJ, Genesis Global Trading was not included in the bankruptcy and was the only entity to hold a BitLicense from the NYDFS. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.