Press release: FinCEN Assesses $3.5 Million Penalty Against Paxful

Document text

Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.

FinCEN Assesses $3.5 Million Penalty Against Paxful for Facilitating Suspicious Activity Involving Illicit Actors | FinCEN.gov

  Skip to main content

An official website of the United States government

Here’s how you know

          Here’s how you know

              The .gov means it’s official.

              Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

              The site is secure.

              The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

              Financial Crimes Enforcement Network

      Menu

            About FinCEN

            About FinCEN

            Mission

            What We Do

            Insignia

            EEO

            Contract Opportunities

            FinCEN Year In Review

            Resources

            Resources

            Alerts/Advisories/Notices/ Bulletins/Fact Sheets

            Bank Secrecy Act Filing Information

            Beneficial Ownership Information Reporting

            Financial Trend Analyses

            Financial Institutions

            FinCEN Exchange

            Innovation

            International

            Law Enforcement

            Ransomware

            Residential Real Estate Reporting

            Suspicious Activity Report (SAR)

            Scams

            Statutes and Regulations

            Whistleblower Program

            Advisories

            News

            News

            Press Releases

            Readouts

            Remarks and Statements

            Enforcement Actions

            Press Contacts

            SAR Technical Bulletins

          Search

           Enter Search Term(s):

Breadcrumb

                              Home

                              News

                              FinCEN Assesses $3.5 Million ...

FinCEN Assesses $3.5 Million Penalty Against Paxful for Facilitating Suspicious Activity Involving Illicit Actors

Immediate Release

December 09, 2025

WASHINGTON—The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has assessed a $3,500,000 civil money penalty against Paxful, Inc. and Paxful USA, Inc. (collectively, Paxful) for willful violations of the Bank Secrecy Act (BSA), the primary U.S. anti-money laundering law that safeguards the financial system from illicit use. Paxful, a convertible virtual currency (CVC), peer-to-peer (P2P) trading platform, facilitated more than $500 million in suspicious activity involving a host of illicit actors. The company enabled transactions with countries including Iran, North Korea, and Venezuela, along with Backpage.com, a website seized by the Department of Justice in 2018 for facilitating prostitution and sex trafficking.
“For years, Paxful disregarded its BSA obligations and facilitated transactions associated with illicit activity and high-risk jurisdictions, such as Iran and North Korea,” said FinCEN Director Andrea Gacki. “FinCEN is committed to mitigating risks to the U.S. financial system while fostering responsible innovation in the virtual asset ecosystem.”
Paxful admits that it willfully violated the BSA, including failing to: (i) register with FinCEN as a money services business (MSB); (ii) develop, implement, and maintain an effective AML program; and (iii) file suspicious activity reports (SARs).
Consistent with FinCEN’s Statement on Enforcement of the BSA—and as outlined in the Consent Order—FinCEN considered a variety of factors in determining the appropriate penalty for this matter. These included mitigating factors, such as the decision by Paxful to terminate its relationship with leadership who oversaw Paxful’s operations at the time the willful violations took place and remediation efforts by the company, including conducting a review to identify and report previously unreported suspicious activity that Paxful processed during the relevant time period.
FinCEN appreciates the close collaboration with its partners from the Department of Justice’s Money Laundering, Narcotics and Forfeiture Section, the U.S. Attorney’s Office for the Eastern District of California, and Homeland Security Investigations.
Compliance Considerations
Effective AML programs can prevent financial institutions from being used to facilitate money laundering and the financing of terrorism. For new and existing financial institutions, such programs should be risk-based and commensurate with the risks posed by the location and size of, and the nature and volume of the financial products and services provided by, the institution. Businesses engaged in money transmission services should ensure that they register and maintain registration with FinCEN as an MSB.
Financial institutions dealing in virtual assets and prepaid access are reminded that the BSA obligation to identify and report suspicious activity is also applicable to transactions effected in these products that take place by, at, or through the financial institution. Financial institutions should consider the coverage of these products within their procedures to monitor for potentially suspicious activity, including the extent to which these procedures support the volume of relevant activity.
Financial institutions with obligations to verify customer identity should ensure they maintain appropriate processes to comply with this requirement. Financial institutions are also encouraged to consider the use of Internet Protocol (IP) address and geolocation data to mitigate exposure to high-risk jurisdictions and prohibited parties. Where applicable, financial institutions should similarly consider the nature of their customers’ businesses to mitigate the risk that such accounts may be engaged in illicit activities.
Lastly, this enforcement action demonstrates the value in taking appropriate and timely mitigating procedures when deficiencies are identified. Financial institutions should take appropriate action to ensure they have a robust culture of compliance, including an appropriate “tone at the top.” Further, financial institutions are encouraged to promptly remediate reporting issues when they are identified to ensure timely and accurate reporting of SARs.
For additional information regarding the facts and circumstances associated with this enforcement action, including the specific BSA violations and their underlying causes, please see the Consent Order between FinCEN and Paxful.
FinCEN Whistleblower Incentive Program
FinCEN maintains a whistleblower incentive program for violations of the BSA and certain national security laws such as the International Emergency Economic Powers Act (IEEPA). Individuals located in the United States or abroad who provide information may be eligible for awards if the information they provide leads to a successful enforcement action that results in monetary penalties exceeding $1,000,000 and the statutory requirements in 31 U.S.C. 5323 are otherwise met. FinCEN is currently accepting whistleblower tips.
###

Financial Institution

Money Services Businesses

          News

          Press Releases

          Readouts

          Remarks and Statements

          Enforcement Actions

          Press Contacts

          SAR Technical Bulletins

Subscribe to FinCEN News Updates

Contact • Subscribe to FinCEN News Updates
Careers • Freedom of Information Act (FOIA) • Site Policies and Notices
Treasury.gov • IRS.gov • Regulations.gov • USA.gov • Vote.gov