Paxful
“Can a peer-to-peer crypto marketplace serve the global unbanked without adequate AML controls — and the answer proved to be no.”
Founded2015
HQDelaware, USA (incorporated); Panama City, Panama (operational HQ during wind-down)
FoundersRay Youssef
IndustryFintech / Crypto
The story
Founded in 2015 as a peer-to-peer Bitcoin marketplace targeting the unbanked and underbanked globally, Paxful grew to 14 million users across 140+ countries with 500+ payment methods. Despite adding biometric KYC (iProov) in 2022 and regional fintech partnerships, the platform failed to maintain adequate AML controls. In December 2025, Paxful Holdings Inc. pleaded guilty to federal criminal charges, paid a combined ~$7.5M in penalties, and ceased all trading operations — entering a formal wind-down phase where only asset withdrawals are permitted.
Last 12 months
Product timeline
2015
Founded as a peer-to-peer Bitcoin marketplace, connecting buyers and sellers across 140+ countries with 500+ payment methods.· pivot
2022
Partnered with iProov for biometric liveness verification during onboarding and transactions.· banking
2022
Partnered with Bnext to drive financial inclusion in Mexico.· banking
2025
Paxful Holdings Inc. pleaded guilty to federal criminal charges including violating the Travel Act, agreeing to a $4M criminal penalty, and received a $3.5M FinCEN fine for AML violations.· pivot
2025
Discontinued all trading, deposit, and account services; transitioned to wind-down mode offering only withdrawal of remaining digital assets.· pivot
Regulated entities
Money Services Business (MSB)
US (FinCEN)
Paxful, Inc. / Paxful USA, Inc.
The stack
Payments / PSP
Accounting gap: none