Co-founder of Paxful admits guilt in Money Laundering conspiracy, faces potential imprisonment
In a surprising turn of events, Artur Schaback, the co-founder and former CTO of Paxful Inc., has pleaded guilty to conspiracy charges related to AML program failures. However, there is no publicly visible impact on Paxful's operations following this development.
Schaback, who allowed customers to trade on Paxful without proper KYC checks from 2015 to 2019, resigned from Paxful Inc.'s Board of Directors, finalizing his separation from the company. It is unclear whether other former Paxful executives will face similar charges.
The guilty plea and resignation were announced in a July 9 press release, with Schaback also resigning as a director at Paxful Holdings, Inc. and its affiliates. The DOJ has not released a statement detailing how Schaback's guilty plea will affect Paxful's current operations and regulatory standing.
Despite these events, Paxful continues to be a well-regulated, Tier-1 financial authority-approved platform. The company has made significant improvements to its compliance processes, including KYC, monitoring, reporting, and sanctions screening.
Paxful suspended its marketplace operations in April 2023 due to regulatory challenges and key staff departures. Roshan Dharia, a senior executive at TrustToken, was appointed as the new CEO of Paxful in June 2023, initially in an interim capacity and has since been confirmed as the permanent CEO.
Under Dharia's leadership, Paxful has tripled in size in the last twelve months, with a global team of nearly 100. A new management team and employees now operate the company, with Schaback having had no role in Paxful's day-to-day operations for over a year.
Ray Youssef, former CEO of Paxful, stepped down in April 2023. Paxful resumed operations in May 2023 after a month-long hiatus. As of August 2025, Paxful remains active and available, including in the USA, with no reported changes linked to board-level personnel matters or legal cases.
Schaback faces a maximum penalty of five years in prison, with sentencing scheduled for November 4. For updates on Paxful’s operational status or regulatory compliance specifically related to Artur Schaback’s case, direct announcements from Paxful or reputable regulatory disclosures would be required, as none are reflected in these recent search results.
[1] Source: Paxful Official Website [2] Source: USA.gov - Financial Crimes Enforcement Network (FinCEN)
- Amidst the legal issues surrounding Artur Schaback, Paxful has been actively integrating digital assets like crypto and bitcoin on its blockchain-based platform, expanding its operations in Africa and other regions.
- Despite Schaback's guilty plea and resignation from Paxful's board, the company's focus on technology and regulation has remained evident, with new hires like Roshan Dharia as the permanent CEO, aiming to strengthen Paxful's Tier-1 financial authority approval and compliance processes.
- As the DOJ continues to assess the impact of Schaback's plea on Paxful's regulatory standing, the company is emphasizing its commitment to transparency, encouraging those seeking updates on the situation to visit the Paxful official website or reputable regulatory disclosures.
