Key Notes

Settlement includes $26.5 million penalty plus $22 million for compliance improvements following regulatory failures.

Paxos allegedly failed to monitor Binance properly, enabling $1.6 billion in illicit transactions between 2017-2022.

Company states all identified issues were remediated over two years ago with no customer account impact.

The New York State Department of Financial Services (NYDFS) has secured a $48.5 million settlement with Paxos Trust Company for alleged anti-money laundering deficiencies and due diligence failures related to the firm’s partnership with the Binance cryptocurrency exchange.

According to a NYDFS press release dated Aug. 7, Paxos was chartered as a limited purpose trust company and given authorization to “engage in virtual currency business”

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