Federal Authorities Target Compliance Failures at Digital Asset Platform

In December, 2025, federal authorities announced coordinated criminal and civil resolutions involving a peer-to-peer convertible virtual currency exchange (United States v. Paxful Inc.).

Mayer Brown writes that the DOJ secured a guilty plea addressing multiple financial crimes statutes. The Treasury Department’s Financial Crimes Enforcement Network (FINCEN) entered a consent order under the Bank Secrecy Act.

Together, the actions reflect an enforcement response to willful anti-money laundering failures within a digital asset platform, and set the framework for penalties, remediation, and ongoing oversight.

The exchange operated as a peer-to-peer service facilitating the transfer of virtual currency among users over several years, but failed to establish the compliance infrastructure required of money transmission businesses. The enforcement came in the context of a broader policy backdrop receptive to digital assets, but conditioned on adherence to existing financial integrity requirements.

The plea resolved conspiracy counts involving deficient compliance controls, unlicensed transmission activity, and facilitation of unlawful commerce through interstate channels.

Authorities described conduct that included marketing anonymity, misrepresenting internal safeguards, ignoring customer due diligence, and omitting suspicious activity reporting, which enabled the movement of proceeds tied to serious criminal conduct and hostile cyber activity.

Financial sanctions were substantially reduced after consideration of the entity’s ability to pay, alongside mandates for extensive corrective measures.

For lawyers advising financial intermediaries, the matter illustrates the consequences of disregarding registration duties, governance expectations, and reporting norms embedded in federal financial crime regimes.

Counsel should emphasize early investment in compliance architecture, credible implementation rather than paper policies, and prompt remediation when deficiencies surface. The resolutions also demonstrate that enforcement risk persists even amid supportive policy signals, particularly where operational choices expose markets to tangible societal harm.