Paxful co-founder and former CTO, Arthur Shabak, pleaded guilty to conspiracy to willfully fail to comply with Bank Secrecy Act requirements regarding the AML program. According to the US Department of Justice, Shabak did not collect required KYC information from customers who opened accounts with Paxful from July 2015 to June 2019. 🏦🔍

Shabak is accused of positioning Paxful as a KYC-free platform by misrepresenting its AML policy to third parties. By failing to implement AML and KYC programs, Shabak allowed Paxful to become a “vehicle” for money laundering, sanctions violations, and other criminal activities.

The hearing of the Shabak case is scheduled for November 4. The maximum penalty is five years in prison.