Changpeng Zhao, Sam Bankman-Fried, Do Kwon… These executives of cryptocurrency-focused companies, who are currently in jail and known by millions of people, are of course the tip of the iceberg… Of the dozens of executives in jail, the world may only see three of them, but regulators do not leave the crypto world alone.

Most recently, Artur Schaback, co-founder of Paxful, a company known for cryptocurrencies such as USDP and PAX Gold, is facing a prison sentence…

He accepted it, just like CZ.

Artur Schaback has pleaded guilty to charges that he failed to adequately enforce money laundering measures, according to a statement from the US Department of Justice. As you may recall, this was one of the major charges against CZ, the former CEO of Binance. CZ also admitted to this “mistake” and went to prison to serve his 4-month sentence. CZ is expected to be released from prison in August.

The US Department of Justice alleges that Schaback failed to adequately comply with KYC rules for person-to-person (P2P) money transfers at Paxful, which he ran from 2015 to 2019. The executive also appears to have made some statements that the platform did not require KYC.

“It started to be used for money laundering”

The ministry’s statement also said that Schaback knowingly and willfully provided false information to third parties and deceived institutions about anti-money laundering rules:

“This has led to Paxful becoming one of the most used platforms for money laundering.”

Schaback stepped down as chief operating officer in February 2022 due to disagreements with Paxful’s famous former CEO Ray Youssef.

Although Paxful resumed token issuance in April 2023, it shut down its marketplace, but later reactivated it with high-level security measures.

Paxful was also used a lot in Nigeria, where there is a huge demand for P2P.

Artur Schaback