New York Department of Financial Services (NYSDFS) has levied a hefty $8 million fine against Genesis Global Trading and revoked its BitLicense.
The thorough investigation revealed the crypto brokerage and marketplace’s lapse in maintaining adequate anti-money laundering (AML) and cybersecurity measures.
BitLicense Revoked
Genesis Global Trading, a recipient of the BitLicense in 2018, had been granted the privilege to conduct various virtual currency business activities, spanning buying, selling, maintaining accounts, and issuing cryptocurrency.
However, recent findings by the NYSDFS highlight the company’s failure to uphold essential regulatory standards.
NYSDFS Investigations from 2018 to 2022
Multiple investigations conducted by the NYSDFS from May 2018 through March 2022 highlighted Genesis Global Trading’s deficiencies in implementing adequate virtual currency and cybersecurity regulations.
The company’s apparent vulnerability to illicit activities and cybersecurity threats prompted regulatory action.
The Breach of Regulatory Protocols
The NYSDFS identified numerous compliance violations, including
- the Bank Secrecy Act/Anti-Money Laundering (BSA/AML),
- transaction monitoring,
- Suspicious Activity Report (SAR) filings,
- Office of Foreign Assets Control (OFAC) screening, and
- cybersecurity controls.
These findings point to a systematic failure of crucial regulatory protocols.
Genesis Global Trading Ceases Operations
As a result of the regulatory crackdown, Genesis Global Trading has ceased operations, as indicated on its website.
The company’s failure to maintain a functional compliance program has led to regulatory consequences and concerns about potential threats to the company and its customers.
NYDFS Superintendent Adrienne Harris Speaks Out
NYDFS Superintendent Adrienne Harris expressed deep concern, stating that Genesis Global Trading’s failure to uphold a functional compliance program demonstrates a blatant disregard for regulatory requirements.
China Against AirDrop Misuse
In a technological feat, Chinese authorities claim to have discovered a method to identify individuals sharing content they consider illegal via Apple’s AirDrop.
The Beijing Municipal Bureau of Justice revealed that a government-linked forensics institute had developed a technique to find the sender’s device name, email, and phone number.
Forensic Breakthrough
According to statements from the bureau, police have successfully pinpointed “multiple suspects” through iPhone device logs.
The forensic work involved understanding AirDrop transmissions, ultimately allowing law enforcement to identify those responsible for spreading inappropriate content.
Hash Values
The institute reportedly found that emails and phone numbers were stored as hash values. To swiftly decipher this information, they employed a detailed rainbow table, a method commonly used to crack password hashes by converting them into plain text.
Authorities claim that these findings significantly enhance the efficiency and accuracy of solving cases related to inappropriate content sharing. Officials believe they can mitigate its potential negative impact on society by preventing further dissemination of such content.
Is Technology Going the Other Way?
AirDrop’s unique feature of operating without an internet connection, allowing the sharing of messages via Bluetooth nearby, makes it particularly advantageous in crowded places such as subways and malls. This aspect also presented challenges for traditional network monitoring tools.
Facing increased scrutiny, Apple implemented restrictions on AirDrop in China in 2022. The company introduced a 10-minute cap on receiving files from non-contacts, aiming to curb misuse.
Apple is under pressure in China due to previous actions, such as removing VPN apps from its Chinese store and limiting the availability of specific products and services.
Apple’s relationship with Chinese authorities has faced strains, as evidenced by government officials being instructed to cease using iPhones at work.
Anas Hasan
January 15, 2024
3 months ago
