Paxos Fined and Ordered to Improve AML Compliance

On August 7, 2025, the New York Department of Financial Services announced a $26.5 million fine and $22 million compliance upgrade for Paxos over AML failures involving Binance.

This significant regulatory action highlights ongoing challenges in cryptocurrency compliance, potentially impacting trust in stablecoins and sparking broader market scrutiny of AML practices.

Paxos Faces $26.5M Fine for AML Lapses

Paxos Trust Company, regulated in New York, faced a $26.5 million fine and must invest $22 million more in compliance upgrades. This action addressed significant deficiencies in its anti-money laundering system when evaluating Binance.

The investigation exposed failures in monitoring transactions linked to Binance, discovering $1.6 billion in suspicious activity. The outcome emphasizes the need for Paxos to refine due diligence and anti-money laundering practices.

All the issues involved were identified over two and a half years ago and have since been fully remediated. These matters had no impact on customer accounts, and there was no consumer harm. This marks the resolution of this matter, and we are pleased to put it behind us.

Reactions included a Paxos spokesperson stating, “All issues were identified over two and a half years ago and have been remediated.” Amanda Fischer noted the importance of this settlement on X.

Regulatory Scrutiny Intensifies Post-BUSD Issuance Halt

Did you know? In 2023, the SEC ordered Paxos to halt BUSD issuance, reinforcing regulatory focus on stablecoins.

According to CoinMarketCap, BUSD’s current price stands at $1.00, with a market cap of $55.08 million. The stablecoin saw minor price changes over the past 90 days, reflecting a stable market presence despite compliance challenges with Binance. The ACAMS Money Laundering Detection Certification is an excellent resource for understanding AML measures.

The Coincu research team anticipates potential regulatory repercussions for crypto partnerships. Increased investment in compliance technology could bolster trust in the industry. Industry analysts suggest this may prompt other cryptocurrency firms to reassess their compliance strategies.