Crypto firm Paxos has agreed to settle with the New York Department of Financial Services over a lack of anti-money laundering compliance for a total of $48.5 million, as per an announcement on Thursday by the regulatory body.
Paxos settlement is composed of two parts
The settlement is composed of two amounts: a $26.5 million penalty and an investment of $22 million into a compliance program.
“The Department of Financial Services has led the nation in regulating the virtual currency industry, protecting consumers and markets through examinations, supervision, and where necessary, enforcement,” said Superintendent Adrienne A. Harris.
“Regulated entities must maintain appropriate risk management frameworks that correspond to their business risks, which include relationships with business partners and third-party vendors. The Department continues taking significant steps to ensure accountability, in turn protecting consumers and safeguarding the integrity of the financial system,” she also said.
Paxos was tasked with managing the distribution of the Binance USD stablecoin through an agreement with a cryptocurrency exchange. According to the NYDFS investigation, $1.6 billion of money used for illegal purposes went through the Binance platform from 2017 to 2022.