Paxos to pay $48.5 million in BUSD case settlement, Binance due diligence flagged
Main Idea
Paxos Trust Company has agreed to pay $48.5 million to settle charges with the New York Department of Financial Services (NYDFS) over compliance failures related to its partnership with Binance for the Binance USD (BUSD) stablecoin.
Key Points
1. Paxos settled with NYDFS for $48.5M over BUSD compliance failures tied to Binance partnership, including a $26.5M penalty and $22M for compliance upgrades.
2. NYDFS cited poor due diligence by Paxos in monitoring Binance's activities, leading to regulatory concerns and enforcement actions.
3. BUSD, once a major stablecoin with over $23B in circulation, was ordered to cease new issuances in February 2023, leading to its gradual decline.
4. The SEC dropped its probe into BUSD in 2024, but NYDFS continued enforcement, highlighting ongoing regulatory scrutiny.
5. Paxos continues to operate under NYDFS supervision and issues other stablecoins, such as PayPal USD (PYUSD).
Description
Paxos Trust Company has agreed to pay $48.5 million to settle charges brought by the New York Department of Financial Services (NYDFS) over compliance failures tied to its partnership with Binance. The regulator accused Paxos of not conducting adequate due diligence when it teamed up with the crypto exchange to issue Binance USD (BUSD), once one of the largest stablecoins in the market. The agreement , finalised on 7 August, puts an end to a long-running legal dispute over the now-defunct BUSD t...
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