Key Takeaways:
- Artur Schaback, Paxful co-founder, faces up to five years in prison for conspiring to neglect AML protocols, with sentencing set for November 4.
- Schaback resigned from Paxful’s board and will pay a $5 million fine; Paxful failed to implement proper AML and KYC programs, facilitating illegal activities from 2015 to 2019.
- Paxful has appointed Roshan Dharia as Interim CEO amidst ongoing legal and regulatory challenges.
Artur Schaback, co-founder of Paxful, faces up to five years in prison after pleading guilty to conspiring to neglect Anti-Money Laundering (AML) protocols at the crypto exchange.
The U.S. Justice Department announced his sentencing is scheduled for November 4.
Paxful Inc. Co-Founder Pleads Guilty to Conspiracy to Fail to Maintain Effective Anti-Money Laundering Program
— Criminal Division (@DOJCrimDiv) July 8, 2024
🔗: https://t.co/B3DCa5DFQY pic.twitter.com/Zbkgi90dEr
Schaback has resigned from Paxful’s board and will pay a $5 million fine in installments.
The charges, filed in March, claim Schaback and Paxful’s CEO failed to implement AML and Know Your Customer (KYC) programs, facilitating illegal activities like money laundering and fraud.
Paxful co-founder Artur Schaback pled guilty to conspiring to operate a crypto exchange without effective anti-money laundering policies.#paxful https://t.co/ViULSTYQY8
— Cryptonews.com (@cryptonews) July 9, 2024
Between 2015 and 2019, Paxful allowed unverified trades and marketed itself as not requiring KYC.
They presented a plagiarized AML policy and made exceptions for high-volume traders.
This case follows Schaback’s lawsuit against co-founder Mohamad (Ray) Youssef over alleged misappropriation and sanctions evasion.
Paxful has since appointed Roshan Dharia as Interim CEO.
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