The post US DOJ orders Paxful to pay $4M fine over illicit crypto transactions appeared on BitcoinEthereumNews.com.

The United States Department of Justice has ordered peer-to-peer cryptocurrency marketplace Paxful to pay a fine of $4 million for criminal conduct involving failure to implement proper anti-money laundering checks. Summary Paxful was fined $4 million after pleading guilty to facilitating illicit transactions and failing to implement anti-money laundering controls. The DOJ said the platform moved $17 million in Bitcoin to illegal sites, including Backpage, generating $2.7 million in profits. A statement released by the DOJ, Paxful has pleaded guilty to multiple federal charges, including conspiracy to violate the Travel Act by promoting illegal prostitution and operating an unlicensed money transmitting business, and knowingly dealing with funds sourced from illicit means. “Paxful profited from moving money for criminals that it attracted by touting its lack of anti-money laundering controls and failure to comply with applicable money-laundering laws, all while knowing that these criminals were engaged in fraud, extortion, prostitution and commercial sex trafficking,” Assistant Attorney General A. Tysen Duva was quoted as saying. The total criminal penalty was initially calculated at $112.5 million, but the amount was reduced after prosecutors determined the firm did not have the financial capacity to pay in full, resulting in a final fine of $4 million. Paxful initially suspended services back in April 2023 but resumed operations shortly after, before permanently shutting down in late 2025. Before closing, the company said in a blogpost that it was no longer able to sustain the high costs of “compliance remediation” and the legal fallout from the “historic misconduct” of the original co-founders, Ray Youssef and Artur Schaback, prior to 2023. According to the DOJ, between December 2015 and December 2022, Paxful served as a primary payment conduit for the classified advertising site Backpage and other “copycat” sites. Prosecutors established that approximately $17 million in Bitcoin was funneled…

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Filed under: News - @ February 12, 2026 7:28 am