Paxful Pleads Guilty in DOJ and FinCEN Settlement, Citing Historic Misconduct as Reason for Wind-Down

Peer-to-peer cryptocurrency marketplace Paxful has announced agreements with the United States Department of Justice (DOJ) and the Financial Crimes Enforcement Network (FinCEN) to resolve longstanding investigations into historic conduct that occurred prior to 2023 under its former leadership.

Paxful has pleaded guilty for its conduct under the former co-founders. The court has scheduled the next appearance for February 10, 2026, to address sentencing. The company stated it "acknowledges and unequivocally condemns its past actions and the past actions of the former co-founders," which it says are inconsistent with its current values under new ownership.

The company cooperated with both agencies throughout the investigation, assisting in clarifying the circumstances. Paxful explicitly links these legal resolutions to its recent decision to wind down operations. It cited the "persistent repercussions of the former founders’ actions, coupled with the intensive compliance enhancements required to address them," as creating an "untenable path forward" for a non-U.S.-based entity.

While Paxful is no longer conducting business, it remains committed to the safe and timely return of any remaining user funds. The company was once the world's largest people-powered marketplace, connecting over 14 million users across more than 140 countries since 2015. It supported over 400 payment methods for trading Bitcoin, USDT, and other digital and local currencies.

The DOJ case is referenced as United States v. Paxful Holdings, Inc., 2:25-cr-00235 (E.D. Cal.), and the FinCEN action is numbered 2025-02.