Genesis Global Trading loses crypto license, fined millions

New York state regulators have slapped the Genesis Global Trading firm with an $8M fine and pulled its BitLicense after finding the crypto brokerage and marketplace failed to maintain proper anti-money laundering and cybersecurity measures.

The New York Department of Financial Services (NYSDFS) filed the settlement action against the company January 4th.

The BitLicense, granted to the company under New York Banking Law in 2018, had allowed Genesis Global to engage all in virtual currency business activity, including buying, selling, maintaining accounts, and issuing the cryptocurrency through the platform and on behalf of consumer investors.

Multiple investigations by the NYSDFS, carried out between May 2018 through March 2022, found the firm deficient in implementing effective virtual currency and cybersecurity regulations, leaving the company “vulnerable to illicit activity and cybersecurity threats.”

The NYSDFS said there were numerous compliance violations relating to the Bank Secrecy Act/Anti-Money Laundering (BSA/AML), transaction monitoring, Suspicious Activity Report (SAR) filings, Office of Foreign Assets Control (OFAC) screening, and cybersecurity controls.

Ceasing operations, the company’s website now reads “Genesis Global Trading, Inc is no longer an active business,” directing visitors to contact a general email address for support.

Genesis Global website no more

“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.

Founded in 2013, Genesis Global Trading is a subsidiary of the venture capital firm Digital Currency Group (DCG).

DCG is also the parent company of Genesis Global Capital, the company that filed bankruptcy in January 2023 after devastating losses resulting from the collapse of crypto exchange FTX.

Harris said the Department’s virtual currency and cybersecurity regulations are often cited as the gold standard around the world, “providing clear and stringent requirements to protect consumers and safeguard institutions from bad actors.”

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