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Paxos Trust Settles New York Charges Over Binance-Related Compliance Failures for $48.5 Million

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Paxos Trust agreed to pay $48.5 million to resolve charges brought by New York’s Department of Financial Services (DFS) over its inadequate oversight of illegal activity tied to cryptocurrency exchange Binance. The settlement includes a $26.5 million civil fine and a $22 million commitment to improve Paxos’s compliance program.

The DFS investigation found that Paxos, which partnered with Binance to market and distribute the Binance USD stablecoin, failed to effectively monitor wrongdoing on Binance’s platform. It did not escalate red flags to senior management and had systemic lapses in its anti-money laundering (AML) controls. A review ordered by New York revealed that between July 2017 and November 2022, about $1.6 billion of transactions on Binance’s platform involved illicit actors such as Ponzi schemers and sanctioned darknet marketplace participants. Transactions also involved entities sanctioned by the U.S. Office of Foreign Assets Control.

Following the regulator’s February 2023 order, Paxos ceased issuing Binance’s stablecoin and ended its partnership with the exchange. Paxos stated it had fully addressed the compliance issues, with no harm to customer accounts or consumers.

Binance itself was not a defendant in this New York case but pleaded guilty in November 2023 and agreed to a $4.32 billion criminal penalty for federal anti-money laundering and sanctions violations. Meanwhile, the U.S. Securities and Exchange Commission dropped its civil case against Binance in May 2025, signaling a shift in cryptocurrency regulation during President Donald Trump’s current term.

Alpha and Omega Semiconductor Settles Export Violation Case with U.S. Government Over Shipments to Huawei

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Alpha and Omega Semiconductor (AOS) has agreed to pay $4.25 million to settle with the U.S. Department of Commerce for unauthorized shipments of power controllers, smart power stages, and related components to Huawei Technologies in 2019. This occurred after Huawei was placed on the U.S. Entity List, which restricts trade and requires licenses for suppliers shipping controlled items.

Although the shipped items were foreign-designed and manufactured, they were subject to U.S. export controls because AOS exported them from the United States. The U.S. government had been investigating these transactions for over five years. The Justice Department closed its criminal investigation without charges in January 2024, but a civil probe by the Commerce Department continued until the settlement.

AOS emphasized that the resolution does not affect its ongoing operations. The company is headquartered in Sunnyvale, California, and operates fabrication facilities in the U.S. and Asia, including a wafer fab in Hillsboro, Oregon. The U.S. expanded restrictions on Huawei in 2020 to include foreign-produced items shipped to the company.

US SEC and SolarWinds Reach Preliminary Settlement in Cyberattack Lawsuit

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The U.S. Securities and Exchange Commission (SEC) has reached a deal in principle with SolarWinds Corp and its chief information security officer, Timothy Brown, to settle litigation related to a Russia-linked cyberattack on the software company. The agreement was revealed in a court filing on Wednesday.

SolarWinds, the SEC, and Brown jointly requested a federal judge to pause court proceedings while they finalize the settlement paperwork, which the judge approved. The case centers around the “Sunburst” cyberattack, which lasted two years and targeted SolarWinds, based in Austin, Texas.

The SEC accused the company and its security officer of defrauding investors by hiding security vulnerabilities. However, much of the SEC’s case was dismissed last year by U.S. District Judge Paul Engelmayer, who criticized the claims as relying on hindsight and speculation.

Both the SEC and SolarWinds declined to comment on the settlement details beyond public filings. SolarWinds expressed satisfaction with the potential resolution and a desire to focus on its business operations moving forward.

The parties plan to file the final settlement documents or a joint status report by September 12.