Paxful ordered to pay $4M after guilty plea in prostitution, money‑laundering case Paxful Holdings, the once-popular peer-to-peer Bitcoin marketplace, has been ordered to pay a $4 million penalty after pleading guilty last year to charges that it facilitated illegal prostitution, violated anti-money-laundering laws, and knowingly handled criminal proceeds. The fine was dramatically reduced from initial proposals because prosecutors concluded the company no longer had the ability to pay a larger penalty. According to U.S. authorities, Paxful — widely used in parts of Africa before it shut down in 2023 — processed as much as $3 billion in crypto trades between 2017 and 2019. That volume reportedly included transactions linked to Backpage, the notorious classified-ad platform associated with illicit sex work. On Paxful’s platform, users negotiated swaps of digital assets for cash, prepaid cards, gift cards and other instruments, and prosecutors say the founders marketed the service as a way to evade the Bank Secrecy Act’s anti-money‑laundering protections. “This sentence sends a clear message: companies that turn a blind eye to criminal activity on their platforms will face serious consequences under U.S. law,” said U.S. Attorney Eric Grant for the Eastern District of California. Prosecutors had at one point contemplated a penalty exceeding $112 million, but ultimately determined Paxful’s diminished financial state limited the amount of the fine. The case underscores increasing U.S. enforcement pressure on peer-to-peer crypto platforms and highlights the legal risks that arise when marketplaces fail to implement robust anti-money‑laundering controls. Read more AI-generated news on: undefined/news

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