Odaily Planet Daily reports that the U.S. Department of Justice announced that the cryptocurrency trading platform Paxful Holdings Inc. has been fined $4 million for failing to establish effective anti-money laundering controls. Prosecutors accused the platform of allowing illegal funds related to scams, prostitution, and human trafficking to flow through the platform over an extended period, profiting from it.
The Department of Justice stated that Paxful was aware that some customer funds involved criminal activities but continued to provide services, using lax anti-money laundering regulations as a selling point to attract users. The investigation also revealed that the platform processed cryptocurrency transactions for websites including Backpage, which was believed to be used for posting prostitution-related ads involving minors.
Data shows that between 2015 and 2022, approximately $17 million worth of Bitcoin was transferred to related websites through Paxful wallets, with the platform earning at least $2.7 million in profit. The Department of Justice said that Paxful’s founder even referred to the business growth resulting from this as the “Backpage effect.”
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Exodus reduced its holdings by 10 BTC and 11 ETH in January, while increasing its holdings by 1334 SOL.
Exodus Movement has updated its digital asset holdings as of January 31, 2026, holding 1,694 BTC and 1,887 ETH, down 10 and 11 respectively, and increasing its SOL holdings by 1,334 to 13,807.
GateNewsBot4m ago
10X Research: Bitcoin Retreats to Liquidity Trap Zone, Market May Reversal
10X Research CEO Markus Thielen stated that after the 2024 US election, Bitcoin could rapidly rise to $90,000, but then fall back to $87,000 due to a liquidity vacuum, facing negative options gamma at $75,000, which leads market makers to sell futures. The market situation could reverse at $60,000.
GateNewsBot11m ago
Tom Lee warns that gold may have peaked. Can Bitcoin become the next focus of capital?
February 12 News, Fundstrat co-founder Tom Lee recently stated that after a strong rally, gold prices are approaching a cyclical high, and the market may soon see a new round of capital rotation. He believes that if risk aversion cools and risk appetite increases, some capital may re-focus on Bitcoin, thereby reigniting the discussion of "which has more long-term value, gold or Bitcoin."
Looking back over the past year, the global financial environment has remained volatile, with geopolitical tensions and inflation pressures recurring, making gold the primary safe-haven choice. Data shows that gold has increased by as much as 73% this year, attracting significant institutional and retail investment. In contrast, Bitcoin has fallen about 29 during the same period, under pressure from regulatory uncertainties and profit-taking. This stark divergence has reshaped the global asset allocation landscape.
GateNewsBot13m ago
Bitcoin funds or a major migration? Barry Silbert predicts 5%-10% flowing into Zcash, as privacy coins face a revaluation window
On February 12, the founder of Digital Currency Group (DCG), Barry Silbert, stated at the Bitcoin Investor Week Conference in New York that in the next few years, approximately 5%–10% of Bitcoin funds may flow into privacy-focused crypto assets represented by Zcash. He believes that Bitcoin remains the core asset, but in terms of privacy and high growth potential, privacy coins may exhibit stronger "asymmetric return" characteristics.
Barry Silbert pointed out that as on-chain analysis tools become more sophisticated, the early narrative of Bitcoin as "anonymous cash" has been weakened, and transaction traceability has become a reality. He emphasized that unless there is a structural collapse of the dollar system, Bitcoin is unlikely to replicate the hundreds-fold growth potential, whereas projects focused on privacy protection and new encryption technologies could potentially offer 500x or even higher returns. He specifically mentioned Zcash and Bittensor, considering these assets more suitable for high-risk, high-reward strategic allocations.
GateNewsBot14m ago
