P2P Bitcoin marketplace Paxful sentenced for promoting illegal prostitution and money laundering
Paxful was ordered to pay $4 million after admitting to conspiring to promote illegal prostitution and money laundering.Summary
The US Department of Justice (DOJ) ordered P2P Bitcoin marketplace Paxful to pay a $4 million penalty after the company admitted to conspiring to promote illegal prostitution and transmit funds derived from criminal activity. Court documents revealed Paxful deliberately avoided collecting customer information, failed to enforce KYC/AML rules, and submitted false compliance policies to regulators. Investigators found the platform enabled nearly $17 million in Bitcoin transfers linked to Backpage and similar sites known for illegal prostitution ads, including cases involving minors. Over its operation from 2015 to 2023, Paxful processed over $3 billion in trades and handled more than $500 million in suspicious transactions linked to ransomware and darknet markets. While the company's cooperation reduced the penalty, co-founder Artur Schaback pleaded guilty in July 2024 to conspiracy to fail to maintain an effective anti-money laundering program.
(Source：Crypto Briefing)