Paxos Settles with NYDFS for $48.5 Million

The New York Financial Services Ministry (NYDFS) has reached a regulation of $ 48.5 million with the cryptographic infrastructure company Paxos for its partnership with Binance and non-compliance with sufficient anti-flowage provisions.

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

The NYDFS said PAXOS had not made a regular reasonable diligence on Binance and saw around 1.6 billion dollars in illicit flows from and to the exchange of crypto via its binance of binance of stable (BUSD).

https://www.youtube.com/watch?v=ry9mi57pbjs

The regulator ordered Paxos to stop distributing Stablecoin in February 2023. Nydfs superintendent, Adrienne A. Harris, said:

“Regulated entities must maintain the appropriate risk management executives that correspond to their commercial risks, which include relations with business partners and third -party suppliers.”

Anti-flowering regulations and know the regulations of your client (KYC) have become a field button problem in the cryptocurrency industry, many companies requiring regulatory clarity on their liabilities and legal responsibilities under the law.

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Paxos faced a repression of the dry and the nydfs on binance stablecoin

The American Securities and Exchange (SEC) commission sent a notice from Wells, warning of potential legal action to PAXOS concerning Stablecoin Busd in February 2023.

SEC officials accused Paxos of having distributed “unregistered titles” and violating consumer protection laws by associating with Binance to distribute Stablecoin. However, the SEC withdrawn Wells’ opinion in 2024.

A day later, the NYDFS also accused Paxos of having sold “unregistered titles”, forcing the company to stop distributing the stablecoin busd.