So, let's see if we can find some clarity in the vagueness used by FinCEN.

FinCEN has found evidence that Paxful, Inc and Paxful USA, Inc (collectively referred to as Paxful) "enabled" transactions termed as "illicit". It is also said to have "facilitated" transactions.

Transactions were with Backpage.com (shut down by the US Department of Justice in 2018 following allegations of "facilitating prostitution and sex trafficking." There were also transactions involving North Korea, Iran and Venezuala.

But what were the specific breaches leading to the penalty?

The company admitted to wilful non-compliance with the Bank Secrecy Act in that it failed to register as a money services business, it failed to develop, implement and maintain an effective counter-money laundering system and if failed to submit relevant suspicious activity reports.

It might seem as if Paxful has got of lightly and there is certainly a case to be made about that. There were mitigating factors, listed by FinCEN as "the decision by Paxful to terminate its relationship with leadership who oversaw Paxful’s operations at the time the willful violations took place and remediation efforts by the company, including conducting a review to identify and report previously unreported suspicious activity that Paxful processed during the relevant time period."

Read the consent order here: https://www.fincen.gov/system/files/2025-12/PaxfulConsentOrder.pdf