Updated Jan 12, 2024 - Business

Genesis Trading settles with NY regulator, loses BitLicense

A woman listens to another speaker during a hearing in an official capacity.

Adrienne Harris, superintendent of the New York Department of Financial Services, during a Senate hearing in Washington. Photographer: Al Drago/Bloomberg via Getty Images

The New York Department of Financial Services on Friday announced a settlement with Genesis Global Trading over its compliance program.

Driving the news: Under the accord, Genesis Trading will pay an $8 million fine and lose its BitLicense, the state's authorization for virtual currency companies.

What they're saying: "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," Superintendent Adrienne Harris said in a statement.

  • Genesis Trading served the liquidity needs of institutional customers. It shut down in September.
  • In a statement, a spokesperson tells Axios that the company "had taken substantial measures to address these historical deficiencies and is pleased to resolve this matter. Genesis appreciates the DFS acknowledgment of management's investment and efforts during and after the examination period."

Be smart: Genesis Trading is a separate company from Genesis Global Capital. This settlement is unrelated to other matters before the state regarding its involvement in the Earn program at crypto exchange Gemini.

  • Its BitLicense dates to 2018.

Details: The consent order from the agency indicates that it first found fault with practices at Genesis in a review that ended in 2019.

  • A subsequent review, ending in 2022, found that little had been done to address those deficiencies, despite significant growth.
  • The first issue cited by NYDFS concerned the robustness of the firms anti-money laundering controls. It also detailed issues with consumer protection, cybersecurity and its reporting, both to its board and the regulator.
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