U.S. DOJ Fines Paxful $4 Million Over Money Laundering and Illegal Activity Compliance Failures

The U.S. Department of Justice (DOJ) has imposed a $4 million penalty on the cryptocurrency exchange Paxful. The settlement resolves a case involving failures in anti-money laundering (AML) controls and violations of the Bank Secrecy Act. The investigation revealed that Paxful's platform was used to facilitate transactions linked to illegal activities, including unlawful sex work. As part of the agreement, Paxful is required to invest significantly in enhancing its compliance program. This enforcement action highlights the ongoing regulatory scrutiny facing crypto exchanges regarding financial crime prevention. The case underscores the importance of robust KYC (Know Your Customer) and AML procedures in the digital asset industry.