FinCEN assesses a $3.5M penalty on Paxful for willful BSA breaches, after the crypto platform facilitated over $500M in suspicious, illicit, and sanctions-linked transactions

FinCEN found that Paxful operated for years without an effective AML program, neglecting to verify customer identities, monitor activity or file required SARs, even as its platform was used for fraud, scams, sanctions evasion and transactions linked to child exploitation. The penalty reflects FinCEN’s conclusion that Paxful’s systemic failures enabled high-risk actors to abuse its services and underscores heightened U.S. scrutiny of non-compliant virtual asset service providers…