The New York Department of Financial Services (NYDFS), the state's finance sector regulator, announced a settlement with Genesis Global Trading that will see the company pay a hefty fine and forfeit its BitLicense for compliance failures that violated the state's digital asset and cybersecurity regulations.

The New York Department of Financial Services (DFS) is preparing to announce a settlement with Genesis Global, a subsidiary of the Digital Currency Group (DCG), according to a recent report by Fortune Magazine.

The New York State Department of Financial Services (DFS) has announced that Genesis Global Trading will pay an $8 million penalty to the state and surrender its BitLicense.These moves come after a DFS investigation found “significant” failings in the company’s anti-money laundering (AML) and cybersecurity programs, the regulator said in a Friday (Jan. 12) press release.The enforcement investigation followed DFS’ examinations of Genesis Global Trading, according to the release.Reached for comment by PYMNTS, a Genesis spokesperson said in an emailed statement that the settlement with DFS regards Genesis Global Trading, an entity that held a virtual currency license with the DFS.“The entity ceased operations in September 2023 and Genesis is in the process of voluntarily winding it down for business reasons,” the statement said. “Genesis had taken substantial measures to address these historical deficiencies and is pleased to resolve this matter. Genesis appreciates the DFS acknowledgement of management’s investment and efforts during and after the examination period.”Genesis Global Trading is a separate entity from Genesis Global Capital, and is the only Genesis entity that was licensed by DFS and was not involved in the Gemini Earn program, the DFS said in its press release.Gemini Earn was a crypto asset lending program offered by Genesis Global Capital and Gemini Trust Company. The Securities and Exchange Commission (SEC) charged the two companies with offering unregistered securities in January 2023, saying its complaint centers on that program.Genesis Global Trading had been licensed by the DFS to engage in virtual currency business activity in the state since 2018, according to the DFS press release.The DFS said in the release that the failings in Genesis Global Trading’s programs left the company vulnerable to illicit activity and cybersecurity threats.“DFS’s virtual currency and cybersecurity regulations are often cited as the gold standard, providing clear and stringent requirements to protect consumers and safeguard institutions from bad actors,” Adrienne A. Harris, superintendent of DFS, said in the release