Carding Forum
Professional
- Messages
- 2,788
- Reaction score
- 1,323
- Points
- 113
Paxful co-founder and former CTO Arthur Shabak pleaded guilty to conspiracy to intentionally fail to comply with anti-money laundering (AML) regulations and Know Your Customer (KYC) procedures.
According to law enforcement, from July 2015 to June 2019, 36-year-old Artur Schaback managed the Paxful P2P platform and was engaged in the business of transferring fiat currencies and digital assets. Shabak allowed clients to open accounts on the platform and trade without passing identification. Moreover, the Shin Bet advertised Paxful as a KYC-free platform, according to the US Department of Justice.
The agency's press release states that the Shin Bet published a fake policy for third parties regarding AML rules, which in fact were not applied on Paxful. The co-founder of the company also did not submit reports on suspicious activity, while knowing that some Paxful users committed criminal acts. Due to its failure to implement AML and KYC programs, the Shin Bet turned Paxful into a tool for money laundering, extortion and fraud, as well as for the implementation of love scams and prostitution, the Ministry of Justice announced.
Shabak pleaded guilty to conspiracy to intentionally fail to comply with AML rules. The court will sentence Shabak on November 4. He faces a maximum sentence of five years in prison, and Shabak must leave the board of directors of Paxful Inc.
In the spring of 2023, the Paxful platform closed due to pressure from regulatory authorities, as well as due to an internal conflict between Shabak and another co-founder of the platform, Ray Youssef. However, a month later, the exchange resumed its activities.
According to law enforcement, from July 2015 to June 2019, 36-year-old Artur Schaback managed the Paxful P2P platform and was engaged in the business of transferring fiat currencies and digital assets. Shabak allowed clients to open accounts on the platform and trade without passing identification. Moreover, the Shin Bet advertised Paxful as a KYC-free platform, according to the US Department of Justice.
The agency's press release states that the Shin Bet published a fake policy for third parties regarding AML rules, which in fact were not applied on Paxful. The co-founder of the company also did not submit reports on suspicious activity, while knowing that some Paxful users committed criminal acts. Due to its failure to implement AML and KYC programs, the Shin Bet turned Paxful into a tool for money laundering, extortion and fraud, as well as for the implementation of love scams and prostitution, the Ministry of Justice announced.
Shabak pleaded guilty to conspiracy to intentionally fail to comply with AML rules. The court will sentence Shabak on November 4. He faces a maximum sentence of five years in prison, and Shabak must leave the board of directors of Paxful Inc.
In the spring of 2023, the Paxful platform closed due to pressure from regulatory authorities, as well as due to an internal conflict between Shabak and another co-founder of the platform, Ray Youssef. However, a month later, the exchange resumed its activities.
