Artur Schaback, co-founder and former CTO of Paxful, has entered a plea deal with U.S. prosecutors admitting to failing to maintain an effective Anti-Money Laundering (AML) program at the crypto exchange.

This agreement could lead to a maximum five-year jail sentence, with Schaback also agreeing to pay a $5 million fine in installments.

The charges allege that Paxful under Schaback's leadership facilitated money laundering, sanctions violations, fraud, and other criminal activities by allowing users to trade without sufficient KYC procedures.

The case highlights regulatory scrutiny and compliance challenges within the cryptocurrency industry.