A Paxful co-founder has pleaded guilty to conspiracy charges for failing to maintain an effective anti-money laundering (AML) program on the peer-to-peer cryptocurrency platform. This led to various criminal activities being conducted on the platform, according to the U.S. Department of Justice (DOJ). He faces up to five years in prison and will step down from Paxful’s Board of Directors.
Paxful Co-Founder Pleads Guilty to AML Conspiracy — Faces up to 5 Years in US Prison
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Paxful Co-Founder Pleads Guilty to AML Failures
The U.S. Department of Justice (DOJ)’s Office of Public Affairs announced on Monday that Artur Schaback, co-founder and former chief technology officer (CTO) of Paxful Inc., has pleaded guilty to “conspiracy to fail to maintain an effective anti-money laundering (AML) program.”
According to the DOJ, from July 2015 to June 2019, Schaback, 36, of Tallinn, Estonia, operated Paxful, a peer-to-peer cryptocurrency platform, without adequate know-your-customer (KYC) protocols. He allegedly marketed Paxful as a platform not requiring KYC, presented fake AML policies to third parties, and failed to file suspicious activity reports despite knowing of criminal activities conducted on the platform.
“As a result of his failure to implement AML and KYC programs, Schaback made Paxful available as a vehicle for money laundering, sanctions violations, and other criminal activity, including fraud, romance scams, extortion schemes, and prostitution,” the U.S. authority stated.
The DOJ noted:
Schaback pleaded guilty to conspiracy to willfully fail to establish, develop, implement, and maintain an effective AML program as required by the Bank Secrecy Act. He is scheduled to be sentenced on Nov. 4 and faces a maximum penalty of five years in prison.
What do you think about the charges against Paxful co-founder Schaback and the crypto platform’s alleged role in these criminal activities? Let us know in the comments section below.
