Genesis Global Trading has settled with New York’s Department of Financial Services after the regulator filed a $1 billion lawsuit in October 2023.
Terms of the settlement disclosed by New York’s Department of Financial Services (NYDFS) Superintendent Adrienne A. Harris said Genesis will forfeit its BitLicense and cease all operations in New York. Additionally, Genesis was fined $8 million due to anti-money laundering (AML) and fraud charges.
Harris’s statement said the Digital Currency Group (DCG) affiliate Genesis failed to maintain a functional compliance program, displaying non-compliance with regulatory requirements established by NY’s DFS. According to the Superintendent, this directly exposed investors and customers to exponential financial risks.
After two assessments, New York regulators found lax AML and cybersecurity systems at the crypto trading startup. The firm reportedly also had no dedicated compliance chief.
The settlement comes months after a $1 billion crypto fraud lawsuit was filed against the firm, its parent company DCG, and crypto exchange Gemini. NY Attorney General Letitia James alleged the trio orchestrated a massive fraud scheme that harmed thousands of investors.
Genesis is the subject of several litigations following the 2022 FTX collapse and the firm’s subsequent bankruptcy.
The crypto firm sued Gemini for $690 million, claiming the exchange benefited at the expense of its creditors. Both companies have been embroiled in a web of controversy stemming from Gemini’s Earn product, another pressure point regulators have cracked down on with lawsuits.
Source: https://crypto.news/genesis-to-surrender-bitlicense-pay-8m-fine-in-nydfs-lawsuit/