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6h ago

Paxos Agrees to $48.5 Million Settlement Over Binance Stablecoin AML Lapses

New York’s Department of Financial Services imposed a $26.5 million fine plus a $22 million compliance upgrade commitment, requiring Paxos to file a progress report by November 5, 2025.

Binance logo is seen in this illustration taken March 31, 2023. REUTERS/Dado Ruvic/Illustration
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Paxos to pay $48 million in New York settlement over AML compliance failures

Overview

  • The settlement resolves NYDFS allegations that Paxos failed to monitor illicit activity, escalate red flags and maintain effective anti-money laundering controls during its Binance USD partnership.
  • A regulator-ordered review found about $1.6 billion of Binance transactions from July 2017 to November 2022 involved illicit actors or entities sanctioned by the U.S. Office of Foreign Assets Control.
  • Paxos must invest $22 million over three years to strengthen its compliance program, focusing on customer due diligence, transaction monitoring and governance protocols.
  • Under the consent order, the company must file a detailed progress report by November 5, 2025, covering improvements to know-your-customer procedures, suspicious activity monitoring and risk management systems.
  • The settlement follows the SEC’s July 2024 decision to close its probe of Paxos without enforcement and Binance’s November 2023 guilty plea and $4.32 billion DOJ penalty for AML and sanctions violations.