Genesis forfeits BitLicense, pays $8 million to settle NYDFS lawsuit Genesis forfeits BitLicense, pays $8 million to settle NYDFS lawsuit
The NYDFS investigation into Genesis found major deficiencies in its compliance with financial regulations related to illicit financial activity.
2 min read
Updated: Jan. 12, 2024 at 8:22 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The New York State Department of Financial Services (NYDFS) announced a settlement with Genesis Global Trading, which includes an $8 million fine and the relinquishment of its license to operate with virtual currencies in New York.
The NYDFS’s investigation into Genesis Global Trading โa subsidiary of Digital Currency Group (DCG) โ revealed major deficiencies in its compliance programs.ย These deficiencies contravened the stringent standards set by the NYDFS and exposed both the company and its customers to a range of potential risks and illicit activities.
Superintendent Adrienne A. Harris highlighted the gravity of these compliance failures, indicating a disregard for regulatory requirements and potential threats to consumer protection.
Relinquished license
As part of the settlement, Genesis Global Trading will surrender its BitLicense, a special license granted by NYDFS for companies to operate using virtual currencies in New York.
Genesis was the only entity under DCG to hold such a license, which it obtained in 2018. The surrender of this license and the ceasing of operations in New York mark a significant retreat from a major market in the U.S.
This settlement and withdrawal from New York present challenges for Genesis Global Trading as it seeks to rebuild its regulatory standing across various jurisdictions.
This development comes amidst a contentious restructuring process within DCG, which involves dealing with the aftermath of failed investments in other crypto entities like Three Arrows Capital and Alameda Research.
The downfall
Genesis Global Trading’s entanglement in these regulatory issues is part of a broader context involving its parent company, DCG.
The collapse of FTX in late 2022, the second-largest cryptocurrency exchange at the time, had significant repercussions for the crypto industry, including for entities like Genesis. The ensuing financial turmoil led to Genesis and its parent company, Genesis Global Capital LLC, filing for bankruptcy in January 2023.
The company’s troubles were further amplified by multiple legal battles with regulatory bodies and DCG, which owed the firm more than half a billion dollars it wanted to recoup.
Genesis and DCG reached a settlement in early January, with the latter paying off most of its debt to the former, marking an end to another critical legal battle for the firm.
However, the company is still embroiled in a lawsuit filed by the New York Attorney General, which also involves DCG and Gemini, over allegations of fraud.
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Author 
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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In this article
Genesis
Genesis is an institutional digital asset markets and a full-service digital currency prime brokerageย providing a single point of access for select qualified individuals and global institutional investors.
Digital Currency Group
Digital Currency Group’s mission is to accelerate the development of a better financial system.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
