Paxful crypto platform fined $4 million after prosecutors say it ‘profited from moving money for criminals’
Paxful was fined $4 million for profiting from inadequate anti-money laundering controls that facilitated criminal transactions.Summary
Paxful Holdings Inc. was sentenced to pay a $4 million fine after prosecutors revealed the crypto trading platform profited from a lack of anti-money laundering (AML) controls, which allowed criminals to move illicit funds from activities like fraud, prostitution, and sex trafficking. Assistant Attorney General A. Tysen Duva stated that Paxful attracted criminals by touting its lack of AML controls. Prosecutors noted that Paxful transferred about $17 million worth of bitcoin to Backpage, a site used for prostitution, resulting in at least $2.7 million in profits for Paxful, whose founders even referred to this growth as the “Backpage Effect.” Paxful pleaded guilty in December to charges including failing to maintain an effective AML program, though the initial proposed penalty was over $112 million, which the DOJ reduced based on the company's inability to pay more than $4 million. The company suspended operations in 2019.
(Source：The Block)