The New York Department of Financial Services (NYDFS) has settled with Paxos for $48.5 million due to its partnership with Binance and alleged shortcomings in anti-money laundering practices. Paxos will pay a $26.5 million fine and invest an additional $22 million to enhance its compliance program. NYDFS highlighted that Paxos did not perform adequate due diligence on Binance, which was linked to approximately $1.6 billion in suspicious transactions involving its stablecoin, Binance USD (BUSD). In February 2023, the regulator ordered Paxos to cease BUSD distribution. NYDFS Superintendent Adrienne A. Harris noted the growing importance of anti-money laundering and Know Your Customer (KYC) regulations in the crypto sector. The U.S. Securities and Exchange Commission (SEC) had previously issued a Wells Notice to Paxos regarding BUSD, accusing it of distributing unregistered securities, but later withdrew the notice in 2024. NYDFS also cited insufficient KYC controls as a reason for its actions against Paxos. Read more AI-generated news on: https://app.chaingpt.org/news

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