Bitcoin Exchange Paxful to Pay $7.5 Million in US DOJ and FinCEN Fines

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Peer-to-peer virtual currency marketplace Paxful Holdings Inc. has agreed to plead guilty to federal charges in the United States. It will pay a total of $7.5 million in criminal and civil penalties for knowingly enabling widespread money laundering and other illicit financial activity through the platform.

According to the US Department of Justice (DOJ), the platform enabled more than 26.7 million trades, totaling nearly $3 billion in Bitcoin transactions between 2017 and 2019, while failing to implement adequate AML processes. Prosecutors allege that Paxful knowingly processed transactions tied to illegal websites, sanctioned countries, and other criminal enterprises.

The settlement includes a $4 million criminal fine imposed by the DOJ and a $3.5 million civil penalty from the Financial Crimes Enforcement Network (FinCEN).

“Paxful made millions of dollars in part by knowingly moving cryptocurrency for the benefit of fraudsters, extortionists, money launderers and purveyors of prostitution,” said Acting Assistant Attorney General Galeotti of the Justice Department’s Criminal Division. “The defendant attracted its criminal clientele by promoting its lack of anti-money laundering controls and its deliberate decision not to identify its customers.”

US Attorney Eric Grant for the Eastern District of California said,

Through its calculated lack of controls, the company made itself available as a vehicle for money laundering, sanctions violations, and other criminal activity, including fraud, romance scams, extortion schemes, and prostitution. This resolution sends a clear message: those who deliberately turn a blind eye to criminal activity on their platforms will face serious consequences under U.S. law.

Paxful, which shut down in 2023, also faces a sentencing hearing scheduled for February 10, 2026.