Genesis Trading Settlement With NYDFS Completed For $8 Million Fine

Key Points:

• Genesis Trading settlement with NYDFS was held for an $8 million fine.
• In 2022, DCG faced regulatory scrutiny, impacting its subsidiaries.

According to Fortune, the New York Department of Financial Services (NYDFS) is set to announce a settlement with Genesis Global Trading, a subsidiary of Digital Currency Group, following revelations of significant flaws in its anti-money laundering and cybersecurity programs.

Genesis Trading Settlement with NYDFS Occurs over Compliance Failures

In the Genesis Trading settlement, the trading firm has agreed to relinquish its BitLicense, halt operations in New York, and pay an $8 million fine.

The investigation revealed Genesis Global Trading’s failure to maintain a functional compliance program, prompting NYDFS Superintendent Adrienne Harris to state: “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.”

Digital Currency Group, a key player in the U.S. crypto scene since its founding in 2015, faced regulatory scrutiny in 2022. Genesis Global Trading, distinct from Genesis Global Capital, played a vital role in providing trading services to institutional and accredited investors within the digital asset empire.

While not implicated in the bankruptcy and lawsuits involving its parent company, the Genesis Trading settlement is a consequence that the company still has to bear. In September, it announced the closure of its U.S. over-the-counter trading platform.

Separately, an ad hoc group of lenders accused Digital Currency Group of failing to meet repayment requirements for its bankrupt subsidiary, Genesis Global. The lenders claim DCG entities still owe significant sums in USD and BTC, with an undetermined amount of bitcoin and $26 million in interest and late fees.