DOJ Indicts Paxful Founder After Company Pleaded Guilty

The US Department of Justice has charged Ray Youssef, co‑founder and former CEO of Paxful, in the US District Court for the Eastern District of California. Court documents allege Paxful operated without proper licensing and failed to maintain effective anti‑money‑laundering controls before it shut down in 2025, including inadequate Know Your Customer procedures and delays in filing Suspicious Activity Reports.

Prosecutors also pointed to specific Bitcoin transfers they say were sent from Paxful wallets to addresses linked to Backpage. Documents state Paxful embedded a "Pay with Paxful" button on Backpage and that undercover federal agents opened accounts and completed transactions prosecutors cite as evidence the platform facilitated unlawful activity.

Youssef has rejected the charges, saying he was deported from Mexico to Los Angeles, arrested and held in Santa Ana before a judge ordered his supervised release; he cannot leave the United States while the case proceeds.

United States, Santa Ana

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