Updated August 7 at 21:06 UTC: This article has been updated to add Paxos response.
The New York Department of Financial Services (NYDFS) reached a $48.5 million settlement with crypto infrastructure company Paxos, which worked with Binance and allegedly failed to maintain adequate anti-currency money laundering clauses.
According to Thursday’s instructions announcement.
NYDFS said Paxos failed to conduct regular due diligence on Binance and saw about $1.6 billion in illegal traffic through its stable Binance USD (Busd).
https://www.youtube.com/watch?v=ry9mi57pbjs
Regulator Command Paxos to stop distribution Stablecoin in February 2023. NYDFS President Adrienne A. Harris said:
“Regulated entities must maintain an appropriate risk management framework corresponding to their business risks, including relationships with business partners and third-party suppliers.”
Anti-money laundering regulations and Get to know your customers (KYC) regulations have become a hot issue in the cryptocurrency industry, with many companies seeking legal liability and liability for regulation under the law.
Related: U.S. Department of Justice can still conduct money laundering, sanctions allegations of Roman storm
Paxos faces SEC and NYDFS beache bones stablecoin
U.S. Securities and Exchange Commission (SEC) Issued the well noticewarn of potential legal action, be aware of bus stability in February
SEC officials accused Paxos of distributing “unregistered securities” by partnering with Binance to distribute Stablecoin and violating consumer protection laws. However, the SEC withdrew its Wells notice in 2024.
A day later, NYDF also accused Paxos of selling “unregistered securities”, forcing the company to stop distributing Busd Stablecoin.
Financial regulators in New York also said the lack of KYC control was one of several reasons for the notice.
“Paxos is required to conduct due diligence on every new client as per DFS requirement”, February 2023 Notice from NYDFS said.
At that time, the regulator explain Although it “authorizes Paxos to issue BUSDs on the Ethereum blockchain”, it does not authorize “Binance-Peg Busd” to be issued on any blockchain.
A Paxos spokesman told Cointelegraph: “The compliance issue discussed is a historical issue discovered two and a half years ago and has since been fully remediated.”
The spokesperson continued: “There are no new claims regarding the release of Paxos with Binance or Busd.”
Magazine: Crypto wants to overthrow the bank and is now in a fight at Stablecoin
