Paxos runs on NYDFS for $ 48.5 million

The New York Department of Financial Services (NYDFS) has reached a $ 48.5 million settlement with the Crypto Paxos infrastructure company for its cooperation with Binance and alleged failure to promote adequate anti-money laundering provisions.

Paxos agreed to pay the New York State a $ 26.5 million penalt announcement.

The NYDFS said Paxos failed to conduct regular appropriate hard work in Binance and saw about $ 1.6 billion prohibited flow from and in crypto exchanges by Stablecoin Binance USD (BUSD).

https://www.youtube.com/watch?v=ry9MI57PBJS

The regulator Paxos ordered to stop distributing Stablecoin in February 2023. NYDFS superintendent said Adrienne A. Harris:

“Regulated entities should maintain appropriate risk management frameworks that match their business risks, which includes relationships with business partners and third-party sellers.”

Anti-Money Laundering regulations and Meet your customer (KYC) Regulations have become an issue with the hot button in the cryptocurrency industry, with many companies seeking clarity of regulation in their legal responsibilities and responsibilities under the law.

Related: The US DOJ can still pursue money laundering, penalties against the Roman storm

Paxos faced pushback from SEC and NYDFS Over Binance Stablecoin

The US Securities and Exchange Commission (SEC) Sent a notice of Wellsa warning of potential legal action, in Paxos regarding bus stablecoin in February

SEC officials have accused Paxos of distributing “unregistered security” and violation of consumer protection laws by cooperating with Binance to distribute Stablecoin. However, the SEC removed the notice of Wells in 2024.

One day later, the NYDFS also accused Paxos of selling “unregistered security,” forcing the company to stop the distribution of Busd Stablecoin.