Genesis Global Trading Settles with NYDFS
Genesis Global Trading, a subsidiary of Digital Currency Group, has reached a settlement with the New York Department of Financial Services (NYDFS) following an investigation into its anti-money laundering and cybersecurity programs. The company will pay an $8 million penalty for its compliance failures, which left it vulnerable to illicit activity and cybersecurity threats.
Genesis’ Compliance Failures
The NYDFS found that Genesis Global Trading did not meet the required standards in areas such as 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, Genesis Global Trading will surrender its BitLicense and shut down its operations.
In a statement, Superintendent Adrienne A. Harris emphasized the importance of maintaining a functional compliance program to protect consumers and institutions from potential threats.
NYDFS Actions Against Crypto
The NYDFS, under Superintendent Harris, has taken supervisory and enforcement measures against cryptocurrency firms. It was the first regulator to take action against Binance and has also addressed compliance issues with Coinbase. The DFS has been proactive in protecting consumers and combating criminal activities within the crypto industry.
Hot Take: Genesis Global Trading Faces Consequences for Compliance Lapses
The settlement between Genesis Global Trading and NYDFS highlights the significance of robust compliance programs in the cryptocurrency sector. Failing to meet regulatory requirements can leave companies vulnerable to illicit activities and cybersecurity threats. This enforcement action serves as a reminder that regulators are actively monitoring the industry and will hold firms accountable for their compliance shortcomings. As cryptocurrencies continue to gain mainstream adoption, it is crucial for businesses to prioritize strong anti-money laundering measures and cybersecurity protocols to protect both their customers and the integrity of the financial system.
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