Paxful Holdings, which pleaded guilty last year to charges by U.S. authorities that it facilitated illegal prostitution, violated money laundering laws and knowingly handled proceeds of crime, was ordered to pay a $4 million fine, a fine significantly reduced due to the company’s current ability to pay.
Peer-to-peer bitcoin This marketplace that was popular in Africa closed in 2023, but Paxful processed up to $3 billion in crypto transactions between 2017 and 2019, according to U.S. authorities, including transactions for client Backpage, an advertising platform for illicit sex work.
“This sentencing sends a clear message that companies that turn a blind eye to criminal activity on their platforms will face serious consequences under U.S. law,” U.S. Attorney Eric Grant for the Eastern District of California said in a statement.
On the Paxful platform, customers negotiated exchanges of digital assets for other items, such as cash, prepaid cards, and gift cards. The founders are said to have marketed the site as a way to circumvent the anti-money laundering constraints of the banking secrecy law.
Prosecutors initially considered a fine of more than $112 million, but the company was determined it could not pay more than $4 million.
Read more: The fall of Paxful: Questions surrounding the demise of the peer-to-peer Bitcoin exchange
