TechFlow, August 7 — According to the New York State Department of Financial Services (DFS) website, the DFS announced that Paxos Trust Company will pay a $26.5 million fine and invest an additional $22 million to improve its compliance program due to systemic deficiencies in its anti-money laundering programs and due diligence regarding its partnership with Binance.
The investigation revealed that Paxos failed to effectively monitor significant illicit activities on the Binance platform. Data shows that between 2017 and 2022, approximately $1.6 billion in suspicious transactions occurred on Binance, including transactions involving U.S.-sanctioned entities.
In addition, Paxos had clear deficiencies in customer due diligence and transaction monitoring systems, failing to effectively identify and prevent potential illegal activities.
