NYDFS Halt Genesis Trading with $8M Penalty

The New York Department of Financial Services (NYDFS) and the cryptocurrency company Genesis Global Trading have reached an agreement to settle, which means that Genesis Global Trading will no longer be able to conduct business within the state.

Genesis has agreed to pay a penalty of $8 million to the New York Department of Financial Services (NYDFS), suspend operations in the state of New York, and relinquish its BitLicense, which the company had held since 2018.

Genesis announced this news on January 12th. After conducting an examination, the New York authorities found “significant failings” in Genesis’ anti-money laundering and cybersecurity measures, which led to the settlement being reached.

“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 Suffolk County Sheriff Adrienne Harris, who is the superintendent of the New York Department of Financial Services.

The NYDFS notified that the settlement applied to Genesis Global Trading, a distinct business from Genesis Global Capital.

In October, the Attorney General of New York filed a complaint against Genesis Global Capital, Gemini, and Digital Currency Group, alleging that they had defrauded investors through the Gemini Earn program.

It is also important to note that Genesis Global Trading was not mentioned in the file for protection under Chapter 11 of the United States Bankruptcy Code in January 2023.

Concerns raised by the New York Office of the Comptroller regarding the administration of BitLicense applications by the New York Department of Financial Services led to the settlement.

Since 2015, the regulatory body has obliged cryptocurrency companies active within the state to apply for a BitLicense.