Paxos Trust has agreed to a $48.5 million settlement with the New York State Department of Financial Services (NYDFS) to resolve charges related to anti-money laundering (AML) and due diligence failures linked to its partnership with cryptocurrency exchange Binance. The settlement includes a $26.5 million fine and an additional $22 million investment by Paxos to enhance its compliance infrastructure. The regulatory action stems from deficiencies in Paxos' oversight and controls during its 2020 collaboration with Binance on the BUSD stablecoin. New York regulators cited Paxos' failure to adequately police illegal activities associated with Binance as the basis for the enforcement measure.