New York regulators have fined Paxos Trust Company $26.5 million for failing to properly monitor its partnership with Binance on the now-discontinued BUSD stablecoin.
The state’s Department of Financial Services said Paxos didn’t conduct sufficient checks on Binance’s controls to block U.S. users from its platform.
In addition to the fine, Paxos will spend $22 million to strengthen its compliance systems. The firm acknowledged the issues, noting they were identified years ago and have since been resolved.
The penalty comes after NYDFS forced Paxos to stop issuing BUSD in 2023. The SEC had also probed Paxos, but dropped its case last year.
Meanwhile, Binance has faced broader legal trouble. Its former CEO, Changpeng Zhao, pleaded guilty to federal charges and agreed to a $4 billion settlement with U.S. authorities.
Paxos says no customers were harmed and is moving on from the matter.
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Source: https://coindoo.com/new-york-hits-paxos-with-major-penalty-over-busd-partnership/