A cryptocurrency trading firm, Genesis Global Trading, Inc., has shuttered its operations and agreed to pay an $8 million penalty while surrendering its licenses to New York state regulators. The New York State Department of Financial Services (DFS) found that the company violated various financial industry rules, particularly in cybersecurity protections, leading to “compliance failures” that exposed it to illicit activity and cybersecurity threats, including money laundering.
The DFS consent order outlined Genesis Global Trading’s breach of its BitLicense terms, the state’s permit for operating a “virtual currency business,” established in 2015 to safeguard consumers. Despite the company’s closure in September, the regulatory action and penalties were only disclosed recently. The DFS did not specify particular cyber threats against the firm, but it criticized the company’s cybersecurity risk assessment, which was “years late” and insufficiently comprehensive.
While the consent order did not make explicit accusations of money laundering involving Genesis Global Trading customers, the DFS highlighted serious deficiencies in the company’s filing of suspicious activity reports (SARs). The number of reports filed during a review period was deemed inadequate in relation to the volume of transactions processed, raising concerns about the effectiveness of the company’s suspicious activity detection measures.
By FCCT Editorial Team
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