The U.S. Department of Justice announced that Paxful Holdings Inc., an online peer-to-peer virtual currency trading platform and money transmitting business, was sentenced on Feb. 10, 2026 to pay a USD 4 million criminal penalty after pleading guilty to conspiracies to promote illegal prostitution in violation of the Travel Act, to operate an unlicensed money transmitting business by knowingly transmitting funds derived from criminal offenses, and to violate the Bank Secrecy Act (BSA) anti-money laundering (AML) program requirement. Court documents describe Paxful’s facilitation of more than 26.7 million trades totaling nearly USD 3 billion in value from Jan. 1, 2017 to Sept. 2, 2019, generating more than USD 29.7 million in revenue, while marketing itself as not requiring know-your-customer (KYC) information, allowing trading without sufficient KYC, presenting third parties with AML policies that were not implemented, and failing to file suspicious activity reports despite awareness of suspicious and criminal activity. The case also details Paxful’s processing of bitcoin transactions linked to Backpage and similar sites, including nearly USD 17 million worth of bitcoin transfers from December 2015 to December 2022, from which Paxful obtained at least USD 2.7 million in profits. Under the resolution, Paxful agreed an appropriate criminal penalty was USD 112,500,000, but the Justice Department determined the company lacked the ability to pay more than USD 4 million. The plea and sentencing were part of a coordinated resolution with the Financial Crimes Enforcement Network (FinCEN), and the department noted that Paxful’s co-founder and former chief technology officer pleaded guilty on July 8, 2024 in connection with the same scheme.

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