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NY Financial Services Dept. Spokesman Accuses Paxos of Allowing Bad Actors to Use BUSD

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According to reports, a spokesman for the New York Financial Services Department (NYDFS) told Reuters on Monday that the management of the Paxos Trust Company\’…

NY Financial Services Dept. Spokesman Accuses Paxos of Allowing Bad Actors to Use BUSD

According to reports, a spokesman for the New York Financial Services Department (NYDFS) told Reuters on Monday that the management of the Paxos Trust Company’s stable and fixed currency BUSD made it open for use by bad actors. The spokesman said that Paxos “violated the obligation to carry out customized regular risk assessment and due diligence update for the BUSD customers issued by Coin and Paxos to prevent bad actors from using the platform, and the token was not managed in a safe and stable way”.

Foreign media: The New York Financial Services Department said that Paxos did not manage BUSD in a “safe and stable” way

Interpretation of the news:


The New York Financial Services Department (NYDFS) has accused the Paxos Trust Company of not carrying out regular risk assessments and due diligence updates for BUSD customers, allowing bad actors to use the platform. This accusation was made public by a spokesman for the NYDFS in a statement given to Reuters on Monday. The statement suggests that the founders of Paxos did not manage the BUSD token in a safe and stable way, which in turn made it susceptible to abuse by malicious actors.

On its website, Paxos describes BUSD as a digital asset that is fully backed by the US dollar, and which can be used as a stable currency for transactions on the Ethereum blockchain. The token can be bought and sold on major cryptocurrency exchanges, and is promoted as an easy-to-use method of transferring value across the internet. However, the recent accusation by the NYDFS spokesman suggests that the BUSD currency may have been used by criminals to carry out illicit activities.

The accusation by the NYDFS is serious, as it suggests that Paxos may have knowingly allowed bad actors to use BUSD for their own purposes. This is a violation of the trust that BUSD investors have placed in Paxos, and it could damage the reputation of the company in the long term. Furthermore, if Paxos is found to have allowed criminal activity to take place on its platform, it could face regulatory sanctions and fines in addition to the loss of investor confidence.

In conclusion, Paxos has been accused by the NYDFS of not carrying out adequate risk assessments and due diligence updates for BUSD customers, making the platform susceptible to abuse by bad actors. This is a serious allegation, and if proven, it could damage the reputation of the company and result in regulatory penalties. Investors in BUSD should be aware of this development and consider the potential risks when making investment decisions.

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