The New York Department of Financial Services (NYDFS) has issued a consent order, revealing that it has reached an agreement with a digital currency trading company following an investigation. The probe uncovered various compliance failures that violated NYDFS’s virtual currency and cybersecurity regulations, exposing the company to potential illicit activities and cybersecurity threats.
NYDFS identified several key areas where the company fell short of its compliance obligations, including deficiencies in its Anti-Money Laundering (AML) program, failure to submit compliant suspicious activity reports, neglecting required Office of Foreign Assets Control (OFAC) screening, and inadequate maintenance of a cybersecurity program. These lapses in compliance left the company susceptible to regulatory scrutiny and potential risks associated with financial crime and cybersecurity breaches.
As part of the settlement, the digital currency trading company has agreed to surrender its BitLicense, a mandatory license for any entity conducting virtual currency business within the state of New York. Additionally, the company will be required to pay a substantial $8 million penalty.
The enforcement action by NYDFS underscores the regulatory commitment to maintaining a robust framework for virtual currency businesses and ensuring compliance with anti-money laundering and cybersecurity standards. This move sends a clear message about the importance of adhering to regulatory requirements to safeguard the integrity of the digital currency industry and protect against illicit activities and cybersecurity threats.
