PANews reported on August 7th that the New York Department of Financial Services (DFS) announced on its official website that Paxos was fined $26.5 million and ordered to invest an additional $22 million to rectify its compliance system for failing to conduct adequate due diligence on its former partner, Binance, and for significant deficiencies in its anti-money laundering compliance system. The investigation found that Paxos failed to effectively monitor suspicious transactions involving Binance, resulting in approximately $1.6 billion in funds suspected of illicit activities flowing into and out of Binance between 2017 and 2022. Furthermore, Paxos's customer due diligence and transaction monitoring procedures were chronically inadequate, failing to promptly identify and address high-risk accounts and activities.