Crypto Crackdown: Genesis Pays $8 Million and Loses License After AML Failures

Following an investigation that revealed substantial deficiencies in its anti-money laundering and cybersecurity programs, Genesis Global Trading, a subsidiary of Digital Currency Group, has agreed to pay an $8 million penalty and voluntarily surrender its license from the regulator, according to the New York Department of Financial Services. The regulatory body, which granted Genesis its BitLicense in 2018, stated in a press release that the cryptocurrency market-maker and brokerage firm lacked “effective risk assessment, supervisory, or control frameworks” to ensure compliance with the state’s virtual currency and cybersecurity regulations.

It also did not file suspicious activity reports promptly or conduct Office of Foreign Assets Control screening. The DFS says that the Genesis platform will be subject to further enforcement action if these shortcomings aren’t addressed.

DFS Superintendent Adrienne Harris says the settlement resulted from an investigation that found Genesis did not meet minimum standards for Bank Secrecy Act and Anti-Money Laundering compliance. The DFS said it also needed to maintain an effective compliance program for its anti-money laundering and Bank Secrecy Act requirements, including transaction monitoring, filing suspicious activity reports, Office of Foreign Assets Control screening, and a robust risk assessment.

According to a separate DFS press release, the DFS’s investigation into Genesis focused on a lending program called Gemini Earn, offered through a separate DFS-licensed Genesis entity, Gemini Trust Company. The DFS said it had concerns that the program may have offered unregistered securities, which are illegal under federal and state law. Gemini Earn was withdrawn in January 2023.

The DFS’s decision to issue an $8 million fine for Genesis comes after the crypto giant ran into several regulatory setbacks in recent years. Genesis’ lending arm worked with failed firms like Three Arrows Capital and Sam Bankman-Fried’s Alameda Research in 2022, leading to the parent firm’s bankruptcy and lawsuits from the SEC and the New York attorney general.

DFS has imposed over $140 million in fines on crypto firms since Harris became its superintendent in late 2021, including a record $30 million fine on stablecoin issuer Paxos last year—Fortune Crypto’s daily roundup of the coins, companies and people shaping the world of crypto. Subscribe today to get all the latest news, analysis, and video on everything happening in the crypto industry.

Most Popular

More from Walops

RECOMMENDED FOR YOU

Guangzhou Bridge Disaster: Barge Crash Plunges Vehicles into Water, Two Confirmed Dead

On Thursday, Chinese state media reported a tragic incident in the Pearl River Delta near Guangzhou city, where two individuals lost their lives, and three are currently unaccounted for. The unfortunate event unfolded when a barge collided with a bridge over the Hongqili Waterway, causing a section...

Amid Epstein Revelations, New Claim: Brin and Ex-Wife Vacationed on Controversial Island

A new set of court documents unsealed on Monday have revealed that Google co-founder Sergey Brin and his ex-wife Anne Wojcicki, the CEO of genetic testing firm 23andMe, vacationed on Jeffrey Epstein's 'pedophile island'.' The new revelations stem from a 2016 email exchange between Sarah Ransome, one...

Fast Track, Higher Cost: US Raises H-1B Premium Processing Fee 12%

US Citizenship and Immigration Services (USCIS) has recently announced a 12% increase in visa application processing fees across a few categories. This includes the widely used H-1B visa, which permits US companies to employ foreign workers in specialized occupations that require theoretical or technical expertise. The new...

Shipping in the Suez Canal Affected by Houthi Assaults in the Red Sea

The Iran-aligned group has launched drones and missile attacks at commercial ships at the southern end of the Red Sea, which connects to Egypt's Suez Canal in the north and the Mediterranean Sea. The attacks have prompted several shipping companies to divert vessels, avoiding the route that...

Siberia Shivers as Temperatures Plummet to a Bone-Chilling -58 Degrees Celsius

Arctic weather enfolded swathes of Russia on Tuesday, with temperatures in the wilds of Siberia falling to minus 58 degrees Celsius (minus 72 degrees Fahrenheit). In Yakutsk, one of the world’s coldest cities, some 5,000 km (3,100 miles) east of Moscow, residents struggled to cope with a...

Farewell to a Diplomatic Giant: Henry Kissinger Passes Away at 100

Henry Kissinger, the scholar-turned-diplomat whose cunning and ambition made him one of the world’s most influential power brokers for over half a century, has died. He was 100. His consulting firm released a statement saying that the former US secretary of state and national security adviser died...

X CEO Linda Yaccarino Faces Calls for Resignation as Elon Musk Supports Antisemitic Statements

Several advertising executives are urging the Chief Executive Officer of X (formerly Twitter) to resign from her role in the wake of an advertiser exodus and scrutiny over owner Elon Musk's antisemitic remarks on the platform. According to CNN, over the weekend, a "groundswell" of advertising executives...

Official Confirmation: Oppo Reno 11 to Utilize MediaTek Dimensity 8200 SoC

The Oppo Reno 11 series is all set to go official in China on November 23 with at least two entries — the regular Oppo Reno 11 and the Pro variant equipped with a periscope telephoto camera. Both models are currently up for pre-reservations in the country,...

Everything You May want to Know aboutDesigning With Cherry Kitchen Cabinets

For ten decades or so, cabinets made of the medium-density cherry hardwood have dominated the interior of many houses. Drawn from the charming American cherry fruit tree, cherry cabinets are widely known for their rot-resistant and moderate durability properties.Both designers and homeowners seem to have an affinity...

Vodafone Sells Spanish Business to Zegona in Bid to Focus on Core Markets

Vodafone (VOD.L) will sell its Spanish business to Zegona Communications (ZEG.L) for 5 billion euros ($5.30 billion) in the second major deal by its new CEO to revamp a company struggling with little growth in mature markets and a lack of cash flow to fund dividend payments....

Western Digital to Create Two Separate Companies, One for Hard Drives and One for Flash Memory

The division will create two companies focusing on the hard drive and flash memory markets. This strategic move aims to increase the performance and competitiveness of each business by providing them with a sharper focus on their respective market segments. Western Digital (WDC.O) is a leading storage...

Rishi Sunak Firmly Opposes Jihad Chants During Pro-Palestine Rallies in the UK

Prime Minister Rishi Sunak has landed in Tel Aviv, Israel, for a two-day visit. He will urge Middle East leaders to "avoid further dangerous escalation" as too many lives have been lost in the conflict with Hamas. In a meeting with Israeli President Isaac Herzog, Mr. Sunak...