NYDFS Superintendent Harris announced a $48.5 million settlement with a virtual currency trust company on August 7, resolving allegations of anti-money laundering program deficiencies and failures in due diligence related to a former business partnership. The settlement requires the company to pay a $26.5 million penalty to the state and invest an additional $22 million to remediate and enhance its compliance program under an NYDFS-approved plan.
The NYDFS’ investigation found the company lacked effective controls to monitor for illicit activity and failed to escalate red flags to senior management and its board. The review identified significant gaps in transaction monitoring, customer due diligence and response protocols for law enforcement requests, which increased the risk of money laundering.
NYDFS also noted that the company’s compliance program allowed customers with shared addresses and corporate documents to open multiple accounts without detection. Superintendent Harris emphasized that regulated entities must maintain risk management frameworks that correspond to their business risks, including relationships with third-party vendors.
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