NYDFS settles Paxos AML and Binance-diligence failures

What changed

NYDFS required Paxos to pay a $26.5 million penalty and invest $22 million in remediation after finding deficient AML controls and insufficient due diligence and escalation concerning Binance and BUSD.

Who it affects

• Stablecoin issuers, trust companies, virtual-currency businesses, investment advisers, and clients

What is still open

• Completion of the remediation plan and continuing supervisory findings

What it means for an advisor

• Strengthen issuer and platform diligence for affiliates, distributors, sanctions exposure, geofencing, transaction monitoring, escalation, and board reporting.