Bank

Billion

As per the latest press release from the U.S. Department of Justice on Monday, July 8, Paxful co-founder Artur Schaback has pleaded guilty to conspiracy and failing to maintain the platform’s anti-money laundering (AML) program. As a result, Artur Schaback has to immediately resign from Paxful’s board and will be facing a sentence later this year in November.
<h3 id="paxful-co-founder-bypassed-kyc-verification">Paxful Co-founder Bypassed KYC Verification</h3>
The latest report from DoJ stated that Artur Schaback operated the crypto trading platform Paxful for nearly four years between July 2015 to June 2019 wherein he allowed customers to open accounts without gathering sufficient <a href="https://coingape.com/hong-kongs-securities-regulator-flags-three-crypto-firms-for-fraud/" target="_blank" rel="noopener noreferrer nofollow">KYC information</a>.
The authorities also accused Schaback of marketing Paxul as a platform that doesn’t require KYC and presented <a href="https://coingape.com/singapore-banks-under-scrutiny-sequel-to-crypto-related-crimes/" target="_blank" rel="noopener noreferrer nofollow">fake AML policies</a> to third parties without any actual implementation taking place at Paxful. Furthermore, Paxful didn’t report any suspicious activity despite the evidence of wrongdoing by its users. In their filing, the <a rel="noopener noreferrer nofollow" href="https://www.justice.gov/opa/pr/paxful-inc-co-founder-pleads-guilty-conspiracy-fail-maintain-effective-anti-money-laundering" target="_blank">DoJ</a> stated:
<blockquote>
 “Schaback made Paxful available as a vehicle for money laundering, sanctions violations, and other criminal activity, including fraud, romance scams, extortion schemes, and prostitution”.
</blockquote>
Paxful and Schaback’s co-conspirator also “created exemptions to AML and KYC policies based on Paxful customers’ trading volumes and their relationships,” as per the filing.
Also Read: <a href="https://coingape.com/alexander-vinnik-pleads-guilty-in-9-billion-crypto-laundering-case/" target="_blank" rel="noopener noreferrer nofollow">Alexander Vinnik Pleads Guilty in $9 Billion Crypto Laundering Case</a>
<h3 id="artur-schaback-faces-five-years-of-jail-term">Artur Schaback Faces Five Years of Jail Term</h3>
Schaback has pleaded guilty to willfully failing to establish and implement effective AML programs as required by the Bank Secrecy Act. He will be sentenced later this year on November 4 and faces a maximum penalty of five years in prison.
On Monday, a plea agreement submitted to a California District Court revealed that government prosecutors proposed a $5 million fine for Schaback, to be paid in three installments: $1 million upon his guilty plea, $3 million at his sentencing, and the remaining $1 million within two years thereafter.
Last year in March 2023, Schaback sued his co-founder and <a href="https://coingape.com/paxful-exchange-shuts-down-ceo-unsure-comeback/" target="_blank" rel="noopener noreferrer nofollow">Paxful’s</a> former CEO Mohamad (Ray) Youssef over having control of the exchange and misappropriation of company funds.
Also Read: <a href="https://coingape.com/breaking-eu-parliament-passes-aml-regulation/" target="_blank" rel="noopener noreferrer nofollow">EU Parliament Passes AML Regulation</a>
The post <a href="https://coingape.com/paxful-co-founder-pleads-guilty-to-aml-violations-faces-jail-term/" rel="noopener noreferrer nofollow">Paxful Co-founder Pleads Guilty To AML Violations, Faces Jail Term</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.

Paxful Co-founder Pleads Guilty To AML Violations, Faces Jail Term

Tabla de contenidos

Coingape News Media

Otros artículos publicados el 9 jul 2024

Bitcoin Price Dips As Germany Moves 16,000 BTC To Exchanges

How to Trade on an NFT Marketplace?

Unbelievable 500X Returns! Transform Your Portfolio with 5thScape – The Investment Opportunity of...

Lionel Messi Backs Solana’s WaterCoin in Environmental Awareness Push

Invesco Galaxy Misses Spot Ethereum ETF S-1 Deadline, Will Approval Be Delayed?

Optimism (OP) Total Value Locked Sinks to 9-Month Low as ETH ETF Nears

¡Únete a nuestro boletín gratuito para recibir actualizaciones diarias de criptografía!