Trading platform Paxful admits criminal offense and will pay a fine of $7.5 million Odaily Planet Daily News: Paxful Holdings Inc., a peer-to-peer Bitcoin trading platform that was shut down in 2023, has agreed to plead guilty to three federal criminal charges and pay a $4 million criminal fine to the US Department of Justice. In addition, FinCEN issued a civil fine of $3.5 million on the same day, with a cumulative penalty amount of $7.5 million. The Department of Justice pointed out that Paxful facilitated approximately $3 billion in transactions and generated over $29 million in revenue between 2017 and 2019, knowing that its platform was being used for fraud, extortion, money laundering, and illegal transactions, and using the "lack of anti money laundering controls" as a selling point to attract illegal users. The investigation shows that Paxful provided trading services for Backpage, an illegal sex trading platform that was shut down in 2018. Between 2015 and 2022, approximately $17 million worth of Bitcoin flowed from Paxful to Backpage and similar websites, generating at least $2.7 million in profits for Paxful. The founding team even celebrated internally the so-called 'Backpage Effect'. At the same time, Paxful also handled suspicious transactions involving sanctioned countries such as Iran, North Korea, and Venezuela, totaling over $500 million, and has long failed to submit suspicious activity reports as required, and misled the outside world about its anti money laundering measures. The Ministry of Justice stated that according to sentencing guidelines, Paxful should have been fined $112.5 million, but due to factors such as his true ability to pay and subsequent cooperation with the investigation, the final criminal fine was determined to be $4 million. The company will receive its final sentencing on February 10, 2026. It is worth noting that Artur Schaback, co-founder and former CTO of Paxful, pleaded guilty to the relevant charges in July 2024.