Paxful Holdings, which pleaded guilty last year to charges by U.S. authorities that it promoted illegal prostitution, violated money laundering laws and knowingly handled the proceeds of crime, was ordered to pay a $4 million fine, much reduced because of the company’s current ability to pay.
Peer-to-peer bitcoin marketplace that had been popular in Africa shut down in 2023, but Paxful had processed as much as $3 billion in crypto trades from 2017 to 2019, according to US authorities, including transactions for client Backpage, an advertising platform for illegal sex work.
“This sentence sends a clear message: 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 the trade of digital assets for other goods, such as cash, prepaid cards and gift cards. The founders are said to have marketed the site as a way around the Bank Secrecy Act’s anti-money laundering restrictions.
Prosecutors had initially sought a fine of more than $112 million, but the company was determined not to pay more than $4 million.
Read more: Paxful’s Fall: Questions in the Death of Peer-to-Peer Bitcoin Exchange
