Genesis Global Trading, a subsidiary of the Digital Currency Group (DCG), has reached a settlement with the New York Department of Financial Services (NYDFS) after the regulatory body filed a $1 billion lawsuit in October 2023. According to the settlement terms, Genesis will forfeit its BitLicense and cease all operations in New York. Additionally, the crypto trading firm has been fined $8 million over charges related to anti-money laundering (AML) and fraud.
NYDFS Superintendent Adrienne A. Harris stated that Genesis failed to maintain a functional compliance program, leading to non-compliance with regulatory requirements set by the NYDFS. The lack of adequate AML and cybersecurity systems at Genesis, along with the absence of a dedicated compliance chief, exposed investors and customers to significant financial risks, according to the Superintendent.
The settlement follows the $1 billion crypto fraud lawsuit filed against Genesis, its parent company DCG, and crypto exchange Gemini by New York Attorney General Letitia James. The lawsuit alleged that the three entities orchestrated a massive fraud scheme that harmed thousands of investors.
Genesis is currently facing multiple legal challenges, including a $690 million lawsuit against Gemini, where the crypto firm claims the exchange benefited at the expense of its creditors. These legal battles stem from the fallout of the 2022 FTX collapse and Genesis’s subsequent bankruptcy, contributing to the broader controversies surrounding Gemini’s Earn product, which has also faced regulatory scrutiny with lawsuits.
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