Peer-to-peer exchange Paxful will halt operations due to legal issues with its cofounder
April 6, 2023 7:03 AM
In a statement posted to the company website, CEO Ray Youssef broke the news and expressed doubt that business would resume as usual.
Paxful, a P2P bitcoin exchange, has temporarily shut down its trading platform and is unsure if it will reopen. In a message posted to the Paxful website, CEO Ray Youssef explained the company's decision.
"Youssef predicted that this news would stun many people. Unfortunately, we have lost some crucial members of staff, but I cannot go into detail right now. Youssef noted the difficulties in navigating regulations, "especially in the P2P sector and in the U.S."
All customer funds have been accounted for, and the Paxful wallet will remain functional, as stated→ by Youssef.
Paxful recommends that its users use a third-party wallet like Exodus Wallet or Muun Wallet for self-custody. Users outside the United States have the option of switching to competing Bitcoin payment services like Bitnob and Noon.
Youssef stated that the company was forced to close due to difficulties such as key personnel leaving and regulatory hurdles, particularly in the United States.
"The future is less secure for Paxful staff. No choices will be taken today, but without the profits from our market, I can't say what will happen. I appreciate the gravity of the situation and am making every effort to guide the organization in the right way. It's a lot to ask of everyone, but I'd like to be as forthright as possible."
After halting trading of ether (Ethereum's native cryptocurrency) on its platform due to the network's transition from proof-of-work to proof-of-stake, the announcement of Paxful's suspension came just a few months later. After that, Paxful solely dealt in bitcoin.
LocalBitcoins, a peer-to-peer (P2P) exchange comparable to Paxful, also announced→ in February that it would be closing down.
In a continent where the peer-to-peer economy is booming, Paxful's popularity has skyrocketed.
According to Paxful, Nigeria was the company's largest market in 2021, with approximately 1.5 million users and $1.5 billion in trade volume.
Market leaders in the region includes Kenya and Ghana.