Paxful Holdings Inc. has pleaded guilty to enabling illicit virtual asset activity and agreed to pay a $4 million criminal penalty, as announced by the U.S. Department of Justice on December 10. The company was found to have processed funds linked to fraud, illegal prostitution, romance scams, and extortion between 2017 and 2019, facilitating over 26.7 million trades worth nearly $3 billion. This case underscores the increasing regulatory scrutiny on crypto markets, particularly in light of the EU's Markets in Crypto-Assets Regulation. Paxful's sentencing is scheduled for February 10, 2026, as authorities continue to clamp down on illegal activities within the cryptocurrency sector.