Paxful Holdings pleaded guilty last year to charges by U.S. authorities that it facilitated illegal prostitution, violated money laundering laws and knowingly dealt with the proceeds of crime and was sentenced to a $4 million fine, which was significantly reduced due to the company’s current ability to pay.
Peer-to-Peer Bitcoin The once popular marketplace in Africa shut down in 2023, but according to U.S. authorities, Paxful processed up to $3 billion in cryptocurrency transactions between 2017 and 2019, including for client Backpage, an illegal sex work advertising platform.
“This sentence sends a clear message: Companies that turn a blind eye to criminal activity on their platforms will face severe consequences under U.S. law,” Eric Grant, U.S. Attorney for the Eastern District of California, said in a statement.
On the Paxful platform, customers can negotiate to exchange digital assets for other items such as cash, prepaid cards and gift cards. The founders allegedly marketed the site as a way to bypass anti-money laundering restrictions under the Bank Secrecy Act.
Prosecutors initially considered imposing a fine of more than $112 million, but the company ultimately decided to pay no more than $4 million.
Read more: The Fall of Paxful: The Problems Behind the Death of Peer-to-Peer Bitcoin Exchanges
