Paxful Ordered to Pay $4M After Guilty Plea in Money‑Laundering and Prostitution Case
The peer‑to‑peer crypto marketplace pleaded guilty in a DOJ case and faces a $4 million criminal fine plus a separate $3.5 million civil penalty from FinCEN [1].
Paxful pleaded guilty to charges tied to money laundering and promoting prostitution and was sentenced to pay a $4 million criminal penalty, after prosecutors said the platform processed more than $3 billion in crypto trades between 2017 and 2019, including transactions linked to Backpage [1][3].
The U.S. Department of Justice initially sought a $112 million forfeiture but reduced the criminal penalty to $4 million based on its assessment of Paxful’s ability to pay; separately, Paxful agreed to a $3.5 million civil penalty with the Financial Crimes Enforcement Network (FinCEN) [1][3][4].
Observers and reporting say the case underscores growing regulatory and enforcement scrutiny of cryptocurrency marketplaces and the need for stronger compliance measures by peer‑to‑peer platforms [2][4].
The outcome highlights enforcement risks for crypto platforms that fail to detect or deter illicit activity and marks a notable example of coordinated DOJ and FinCEN action against a marketplace model [4][1].
Anonymous signal used only for weekly cluster rankings. No public counters.
Share
Broadcast this coverage
Copy-ready links for the networks your audience checks first.
Support independent reporting
If this summary helped, a small tip helps keep ClusterWire running.
Privacy note: we log tip UI events (page + action, and article slug when applicable) to improve the feature. We don’t store IP address, user-agent, or wallet addresses in analytics. Tips are on-chain, so the sending address is public in the transaction.
Citations
Follow the primary reporting behind this analysis. Click a citation to open the referenced source in a new tab.
- 1Paxful Hit with $4 Million Penalty Over Illegal Transactions and CrimesBlockonomi• Feb 11, 2026
- 2P2P Bitcoin marketplace Paxful sentenced for promoting illegal prostitution and money launderingCrypto Briefing• Feb 11, 2026
- 3
- 4U.S. DOJ hits Paxful for $4 million in case tied to illegal sex work, money launderingCoinDesk• Feb 11, 2026
Themes
Themes driving this story
Curated from the cluster of sources powering this article.