Genesis Global Trading Surrenders BitLicense, Settles $8M Fine in NYDFS Lawsuit

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Genesis Agrees to Forfeit BitLicense and Cease Operations

In a significant development, Genesis Global Trading, a Digital Currency Group (DCG) affiliate, has reached a settlement with the New York Department of Financial Services (NYDFS) following a $1 billion lawsuit filed in October 2023.

$8 Million Fine Imposed Due to AML and Fraud Charges

NYDFS Superintendent Adrienne A. Harris disclosed the terms of the settlement, stating that Genesis will surrender its BitLicense and cease all operations in New York. Moreover, the crypto trading firm faces an $8 million fine, attributed to alleged violations of anti-money laundering (AML) and fraud regulations.

Failure to Maintain Compliance Program and Risks to Investors

Superintendent Harris pointed out that Genesis failed to uphold a functional compliance program, showcasing non-compliance with regulatory requirements set by NYDFS. This lack of adherence exposed investors and customers to significant financial risks, leading to the imposed penalties.

Lax AML and Cybersecurity Systems Uncovered

New York regulators conducted two assessments, revealing lax AML and cybersecurity systems at the crypto trading startup. Notably, Genesis lacked a dedicated compliance chief, further exacerbating its regulatory shortcomings.

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Settlement Follows $1 Billion Crypto Fraud Lawsuit

The settlement comes in the wake of a $1 billion crypto fraud lawsuit filed against Genesis, its parent company DCG, and the Gemini crypto exchange. The New York Attorney General, Letitia James, alleged that the trio orchestrated a massive fraud scheme that adversely affected thousands of investors.

Litigation Saga After FTX Collapse and Bankruptcy

Genesis is entangled in multiple litigations, stemming from the 2022 FTX collapse and the subsequent bankruptcy of the firm. The crypto trading company had previously sued Gemini for $690 million, claiming the exchange benefited at the expense of its creditors.

Controversy Surrounding Gemini’s Earn Product

Both Genesis and Gemini have been embroiled in controversy, with regulatory scrutiny intensifying on Gemini’s Earn product. This additional pressure point has led to lawsuits and further complications for the two companies.

This settlement marks a crucial chapter in the ongoing legal battles within the cryptocurrency industry, underscoring the importance of regulatory compliance and the consequences for those who fall short.



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