The post Paxful Fined $4M After DOJ Cites AML Failures appeared on BitcoinEthereumNews.com.

Key Insights: Paxful fined $4M over AML violations DOJ cited ties to trafficking and fraud Original $112.5M penalty reduced due to finances The U.S. Department of Justice said Paxful Holdings Inc. was sentenced to pay $4 million after admitting it profited from illicit transactions. The order followed a December guilty plea tied to anti-money laundering violations and conspiracy charges. Prosecutors said the peer-to-peer crypto exchange knowingly facilitated funds connected to fraud, prostitution, and sex trafficking. The action placed Paxful under renewed scrutiny within crypto compliance debates. Paxful had marketed itself as a platform with minimal identity checks, which regulators said attracted high-risk users. The fine closed a multi-year investigation centered on the platform’s anti-money laundering controls and its internal awareness of criminal misuse. DOJ Details Criminal Exposure And Revenue The Justice Department stated that Paxful facilitated over 26 million trades worth nearly $3 billion between January 2017 and September 2019. During that period, prosecutors said the company collected more than $29.7 million in revenue. Officials added that Paxful had agreed an appropriate criminal penalty would total $112.5 million, though an internal review concluded it lacked the capacity to pay more than the imposed $4 million. Source: X Assistant Attorney General A. Tysen Duva said the platform profited from criminals it attracted by touting weak compliance safeguards. Investigators argued Paxful presented anti-money laundering policies that were not implemented or enforced. That admission formed part of the company’s plea agreement, which acknowledged failures to maintain an effective compliance program. Backpage Relationship Amplified Legal Risk The Justice Department also described Paxful’s dealings with Backpage, a classified advertising website authorities shut down over illegal prostitution listings. Prosecutors said Paxful knowingly transferred crypto for Backpage and another similar site. Between 2015 and 2022, roughly $17 million worth of bitcoin moved from a Paxful wallet to…

---

Filed under: News - @ February 12, 2026 8:26 am