Overview
- Paxful admitted to conspiring to violate the Travel Act, operating an unlicensed money-transmitting business, and failing to maintain a Bank Secrecy Act–compliant AML program.
- The resolution was coordinated with FinCEN, which also imposed a separate civil penalty reported at $3.5 million for suspicious transactions tied to high‑risk jurisdictions.
- Prosecutors said the platform marketed minimal identity checks, used unenforced or fake AML policies, and failed to file SARs, drawing users linked to prostitution, fraud and other crimes.
- Court documents cite ties to Backpage and similar sites, including about $17 million in bitcoin transfers and at least $2.7 million in Paxful profits, alongside activity linked to Iran and North Korea.
- From 2017 to 2019, users completed more than 26.7 million trades totaling nearly $3 billion, and a sentencing hearing is set for February following the company’s cooperation and remedial steps.