CoinVoice has learned that, according to an announcement on the official website of the New York Department of Financial Services (DFS), Paxos has been fined 26.5 million dollars for failing to conduct adequate due diligence on its former partner Binance, and for significant deficiencies in its anti-money laundering compliance system, and is required to invest an additional 22 million dollars to rectify the compliance system.

The investigation found that Paxos did not effectively monitor suspicious transactions involving Binance, resulting in approximately 1.6 billion dollars in funds related to illegal activities flowing in and out of Binance between 2017 and 2022.

Additionally, Paxos's customer due diligence and transaction monitoring procedures have long been inadequate, failing to timely identify and address high-risk accounts and behaviors.[Original link]