The New York State Department of Financial Services (DFS) has reached a $48.5 million settlement with Paxos Trust Company due to deficiencies in its anti-money laundering (AML) program and failures in due diligence related to its partnership with Binance.
Paxos Agrees to $48.5 Million Settlement Over AML Deficiencies Linked to Binance Partnership
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Superintendent Adrienne A. Harris announced that Paxos will pay a $26.5 million penalty and invest an additional $22 million to enhance its compliance measures. The DFS investigation revealed that Paxos lacked adequate transaction monitoring and compliance controls, which increased the risk of money laundering, particularly through its relationship with Binance, where significant illicit transactions were identified. The DFS says that the settlement underscores its commitment to regulating the virtual currency industry and ensuring that financial entities maintain robust risk management frameworks to protect consumers and the integrity of the financial system.
