A New York financial regulator has ordered crypto firm Genesis Global Trading to pay an $8 million fine after it was found to be violating the law.
In a new press release, the New York State Department of Financial Services (DFS) says the crypto trading arm of Digital Valuta Group (DCG) has failed to comply with virtual currency and cybersecurity regulations, leaving them susceptible to hacks and exploits .
After an investigation, the DFS found that Genesis not only failed to meet security standards, but also failed to meet Bank Secrecy/Anti-Money Laundering Act compliance requirements.
In addition, the DFS investigation found that Genesis failed to file suspicious activity reports (SARs) and screen with the Treasury Department’s Office of Foreign Assets Control (OFAC).
As stated by DFS Superintendent Adrienne A. Harris in the press release:
“DFS’s virtual currency and cybersecurity regulations are often cited as the gold standard, setting clear and stringent requirements to protect consumers and institutions from bad actors.
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.”
As a result of the violations, Genesis Global Trading will be forced to surrender its BitLicense, which is a requirement to operate digital asset businesses in New York State.
Under Harris, the DFS has levied $140 million in fines on crypto companies – including US crypto exchange platform Coinbase and stablecoin issuer Paxos – to date, the press release said.
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