Paxos Fined $48.5M by NYDFS Over Binance and AML Failures

Paxos Penalty and Compliance Issues: Paxos Trust faces a $48.5 million penalty from the New York State Department of Financial Services for inadequate anti-money laundering practices, particularly in its oversight of Binance, leading to significant suspicious transactions between 2017 and 2022.

Regulatory Actions and Future Implications: The NYDFS emphasizes the need for robust risk management frameworks among regulated entities and has previously ordered Paxos to cease minting Binance USD (BUSD), indicating ongoing scrutiny and enforcement in the crypto sector.