Paxful co-founder could face 5 years in US prison after pleading guilty – DiarioBitcoin
By Hannah Perez
Artur Schaback pleaded guilty to charges of failing to enforce anti-money laundering controls for cryptocurrency exchanges before the U.S. Department of Justice.
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- Artur Schaback pleaded guilty to failing to implement proper AML controls at Paxful
- He pleaded guilty to charges brought by the U.S. Department of Justice and will be fined $5 million
- He could face five years in prison, he will be sentenced in November
The co-founder of PaxfulArtur Schaback, could be facing bars in the United States now that he has pleaded guilty to charges of failing to maintain effective anti-money laundering (AML) controls at the cryptocurrency exchange.
In a statement released Monday, the U.S. Department of Justice (DOJ) announced Schaback’s guilty plea. Meanwhile, a plea agreement reveals a fine totaling USD $5 million for Schaback.
Prosecutors said the Former CTO of the company supposedly operated the exchange of cryptocurrencies Paxful from July 2015 to June 2019 without collecting effective amounts of know-your-customer (KYC) information, such as name, date of birth, address and “other identifying information”.
Schaback, a native of Estonia, not only allowed clients to open accounts and trade on Paxful without collecting sufficient information from customers, but falsely promised that the platform did not require KYC and failed to report suspicious activity on the platform to authorities, government officials added.
“As a result of its failure to implement AML and KYC programs, Schaback made Paxful available as a vehicle for money laundering, sanctions violations, and other criminal activity, including fraud, romance scams, extortion schemes, and prostitution.“the DOJ wrote.
Schaback, who faces a maximum prison term of five years, will be sentenced on November 4 and has agreed to resign from the board of directors of Paxful Inc.according to the statement.
The 36-year-old executive, who served as Paxful’s COO until February 2022, has been mired in a legal dispute with former CEO Mohamad (Ray) Youssef over control of the exchange with allegations of misappropriation of company funds, money laundering, and sanctions evasions, among others.
Paxfulwhich offers commercial services of Bitcoin peer-to-peer (P2P) platform temporarily suspended its activities last year amid legal disputes between partners, but now appears to be operating normally.
Article by Hannah Estefanía Pérez / Bitcoin Diary
Picture of Unsplash
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