Paxos settles with New York regulator for $48.5M over Binance partnership

The New York Department of Financial Services (NYDFS) said the fine was due to a lack of anti-money laundering oversight.

The New York Department of Financial Services (NYDFS) reached a $48.5 million settlement with crypto infrastructure company Paxos over its partnership with Binance and alleged failure to uphold sufficient anti-money laundering provisions.

Paxos agreed to pay New York state a $26.5 million penalty and will spend an additional $22 million to overhaul its compliance program, according to Thursday’s announcement. 

NYDFS said Paxos failed to conduct regular due diligence on Binance and saw about $1.6 billion in illicit flows from and to the crypto exchange via its stablecoin Binance USD (BUSD).

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