Paxful co-founder and former CTO Artur Schaback was convicted on charges of willfully failing to establish, develop, implement and maintain a compliant AML program required by the Bank Secrecy Act. 🚨
The US Department of Justice announced that Schaback did not collect required KYC information from customers who opened accounts on Paxful between 2015 and 2019. It was also alleged to have misleadingly marketed its AML policies to third parties and failed to file any suspicious activity reports.
By neglecting to implement AML and KYC programs, Schaback turned Paxful into a "tool" for money laundering, sanctions violations, and a variety of other criminal activities. 🚔
Schaback's sentencing is scheduled for Nov. 4. The maximum penalty is five years' imprisonment. This will be determined by a federal court judge who will consider the U.S. Sentencing Guidelines and other legal factors. During this time, Schaback will also leave Paxful Inc.'s Board of Directors.