Just In: Genesis Global Trading Inks $8M Settlement With NYDFS

According to a signed consent order, the New York State Department of Financial Services (NYDFS) has agreed to the Genesis Global Trading settlement deal which includes an $8 million penalty payment.

Genesis Forfeits its BitLicense

On Friday, Digital Currency Group (DCG) subsidiary Genesis Global Trading agreed to the settlement with NYDFS on the premise that it would cease its operations from New York and forfeit its BitLicence for virtual currency activities in the state. The company also agreed to pay $8 million to the state after it was accused of violating rules associated with anti-money laundering and fraud.

According to NYDFS Superintendent Adrienne A. Harris, Genesis Global made itself vulnerable to illicit activities as well as cybersecurity threats. 

“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,” Harris pointed out in a statement.

In October 2023, New York Attorne­y General (NYAG) Letitia Jame­s took legal action against Genesis, Gemini, and DCG. She accused the trio of defrauding 230,000 investors of over $1 billion through the Gemini Earn program. 

Genesis Global was specifically indicted for engaging in le­nding activities with risky borrowers, contradicting the low-risk image­ presented by Ge­mini.

Multiple Legal Enforcement Action Overwhelms Genesis Global

The current Genesis settlement comes amidst this ongoing enforcement action from the AG’s office. It is not yet clear how Genesis Global’s settlement with the NYDFS will impact the NYAG’s case and in the meantime, no official statement has been made to that effect.

Since that time till now, Genesis has faced quite some legal issues including a tussle with Gemini over the 60 million Grayscale Bitcoin Trust (GBTC) shares that the former pledged as collateral to Earn product users. Gemini tried to take full ownership of the shares seeing that their business relationship (Earn program) went sour but Genesis was not having it.

SEC also sued Genesis for offering billions of dollars worth of unregistered securities for sale to hundreds of thousands of investors. Amidst the legal debacle and Genesis settlement, DCG has resolved $1 billion in debts, with $700M to Genesis.