Cooperation, Remediation Lead to Reduced Penalty
The plea agreement notes that Paxful Holdings cooperated extensively with investigators, accepted responsibility, and undertook sweeping remediation efforts—including hiring an independent auditor, replacing its compliance unit, freezing suspect transactions automatically, strengthening AML/KYC policies, halting U.S. operations, and removing all management tied to the misconduct.
Prosecutors initially calculated a criminal fine of $112.5 million, reflecting a 25% discount based on cooperation and lack of prior violations. But given Paxful’s financial condition, the government determined it could pay $4 million, which became the final penalty.
Representatives for both sides did not immediately respond to requests for comment.
Legal Teams
The U.S. government is represented by Kevin Gerard Mosley, Caylee E. Campbell, and Katherine Nielsen of the DOJ, along with Matthew Thuesen from the Eastern District of California.
Paxful Holdings is represented by
Eugene Ingoglia (Esseks Ingoglia) and Patrick T. Hein (Allen Overy Shearman Sterling US LLP).
