Overview
- A federal judge approved a $4 million criminal penalty after Paxful pleaded guilty to conspiracies under the Travel Act, the Bank Secrecy Act’s AML program requirement, and operating an unlicensed money transmitting business.
- Prosecutors said the platform knowingly facilitated criminal proceeds, including transactions for Backpage, after touting lax identity checks and presenting sham compliance policies.
- Court filings show Paxful processed more than 26.7 million trades worth nearly $3 billion between 2017 and 2019, generating about $29.7 million in revenue.
- Although the parties agreed the appropriate criminal penalty was about $112.5 million, DOJ determined Paxful could not pay more than $4 million based on an independent financial review.
- The resolution was coordinated with Treasury’s FinCEN, which secured a separate $3.5 million civil penalty, and investigators from IRS-CI and HSI participated as co-founder Artur Schaback had already pleaded guilty in 2024 to related AML failures.