The aftermath of financial wrongdoing led to a modern AML saga that shows the consequences of insufficient anti-money laundering measures. The New York Department of Financial Services (NYSDFS) have acted after Genesis Global Trading, once bestowed with the coveted BitLicense, breached several AML compliance regulations, handing the company an $8 million fine. Consequently, the business has effectively closed down, unable to continue following the findings and actions taken.
This major news is another reminder to all businesses operating in the financial and law sector that failure to adhere to the regulations will have serious consequences. It is essential businesses and law firms are operating in the right way to ensure this never happens to them. Compliance is a daily challenge to navigate but there are solutions out there to ease the difficulties and adhere to the regulations in place.
AML Compliance Failings Amongst Revelations Leading to Severe Repercussions
The NYSDFS fined Genesis Global Trading $8 million due to multiple investigations that revealed weak anti-money laundering and cybersecurity practices. Compliance violations such as BSA/AML protocols, transaction monitoring, SAR filings, OFAC screening, and cybersecurity measures were neglected. The state body criticised the company’s complacency, leaving it and its clients vulnerable to threats.
For businesses navigating financial markets, Genesis’s story serves as a lesson. These cases highlight the crucial relationship between legal compliance and ethical business practices. Each violation presents a challenge, while each correction brings insight. Following strict guidelines is not just paperwork; it’s the foundation for business strength or weakness.
A Firm Stance From Financial Regulators
Global financial regulations are experiencing a significant shift. The recent cases where fines have been given to International & Commercial Bank of China and Genesis Global Trading stress the regulators determination to stamp out compliance failures. Fines totalling $40 million is a stark reminder that even the biggest companies will be punished should they breach any regulations. These rules aim to protect consumers and hold companies accountable for their actions.
The NYSDFS’s strict rules on virtual currency and cybersecurity are highly respected worldwide. They represent the essence of protecting institutions and consumers, providing a blueprint of protection that requires the attention of financial experts globally. It is, in all fairness, the real accusation in the ongoing scrutiny of AML compliance.
A Clear Reminder to Legal Firms Facing AML Challenges but Solutions are Available
The recent fines not just in New York but here in the UK for AML compliance failures are a warning to lawyers and law firms. Law firms like Clyde & Co and TTS Legal have been hit with heavy fines while individual failings like Richard Lloyd Jones have also been sanctioned by the regulators as the crackdown on AML shortcomings intensifies.
Legal firms and workers grapple daily with AML challenges, striving to complete the necessary due diligence on potential clients while adhering to the strict regulations in place. The governing bodies are clear regarding their position so law firms must respect and adapt to the legislations in place. It’s a difficult challenge but solutions are out there to ensure law firms can do effective checks and due diligence on potential clients.
Innovations in technology in particular are providing a viable solution to those ongoing AML and compliance challenges. Tech products like Verify 365 are playing a major role in how law firms are operating to adhere to regulations. Verify 365’s innovative client onboarding platform is your ideal AML and compliance solution, allowing you to complete compliant due diligence and identity checks within minutes.
Verify 365 is changing the landscape for law firms allowing them to streamline their processes, offer an improved overall service and enhance the client experience. Complete identity verification checks in minutes with our innovative biometric Dynamic ID software, complete effective address verifications as well as company and source of funds checks.
Access over 2000 legal documents, secure digital documentations and payments with e-signatures and e-payment options. Crucially, the Verify 365 platform allows you to streamline your processes and have access to all the tools you need in one place.
The platform ensures you are adhering to the regulations place, allowing you to complete compliant checks and keep your firm on the right side of the guidelines. It’s critical to stay on top of any subtle changes and as demonstrated above, the authorities are determined to punish regulation breakers.
Compliant Failures Will Have Severe Consequences
Failure to prepare, prepare to fail is the best way to describe Genesis’ shortcomings. They failed to adhere to several regulations including AML compliance and they have paid the ultimate price with the business no longer operating.
It serves as a wake up call and reminder to all businesses operating in the legal and financial sectors that compliance regulations are critical to any functioning business. Failing to adhere will lead to severe consequences and with regulators on top of their game, law firms and finance business must match that.
