Paxful Co-founder Artur Schaback Pleads Guilty to 'Conspiracy to Fail to Maintain an Effective AML Program'
The co-founder and former chief technology officer (CTO) of Paxful Inc., Artur Schaback, pleaded guilty to conspiracy to fail to maintain an effective anti-money laundering (AML) program.
- "According to court documents, from July 2015 to June 2019, Artur Schaback used Paxful Inc. to operate Paxful, an online peer-to-peer virtual currency platform and money transmitting business where customers negotiated for and traded virtual currency for a variety of other items, including fiat currency, pre-paid cards, and gift cards," was stated in the press release.
"During this time, Schaback allowed customers to open accounts and trade on Paxful without gathering sufficient know-your-customer (KYC) information; marketed Paxful as a platform that did not require KYC; presented fake AML policies to third parties that he knew were not, in fact, implemented or enforced at Paxful; and failed to file a single suspicious activity report, despite knowing that Paxful users were perpetrating suspicious and criminal activity."
- 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."
- Schaback faces up to 5 years in prison and is scheduled for sentencing on November 4, 2024. He has agreed to pay a $5 million fine and resign from Paxful’s board of directors.
