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- Popular peer-to-peer (P2P) Bitcoin (BTC) exchange platform, Paxful, is on the verge of shutting down.
- The exchange announced the suspension of its operations and marketplace.
Paxful Co-Founder and Chief Executive Officer– Ray Youssef shared a message on the official website about suspending their operations. It consisted of the announcement of Paxful “suspending its marketplace.” Though the decision to withhold operations came from the leading executive, it was also “not sure it will come back.”
Youssef highlighted the incident as shocking to many people. Although he refrained from sharing his “full story”, which potentially acted as a reason behind the suspension, he cited the departure of company staff. In addition, he also claimed the “regulatory challenges” within the crypto industry hinder the growth. Running a crypto enterprise focusing on the peer-to-peer sector, and that too in the United States, makes it tougher.
Further, Youssef ensures the Paxful Wallet will operate as usual until customers retrieve funds. He also offered other alternatives to the customers while naming other service providers.
Youssef said, “While we work through these issues, we have taken the most secure option and ask you to explore self-custody and trade elsewhere.” He cited service providers, including Bitnob, a Bitcoin payments company; Noones, a recently created peer-to-peer marketplace; and Yellow Card, an African crypto exchange.
Reportedly, after suspending operations announcement, Youssef also cited some other concerns during Twitter Spaces. He cited a lawsuit filed by another Paxful co-founder, Artur Schaback. He said this creates concern about the potential threats to customer funds and the security of the platform could not be guaranteed. This also makes the reason behind the platform “to go down.”
While giving some more details, Youssef said that in the wake of his anger, Schaback sued the company, and the legal team put up quite distasteful allegations. The lawsuit made the senior-level staff leave the company as they could not do anything about it. He even said that Schaback did not even pay the compliance to employees.
Earlier, Paxful suspended Ethereum’s trading on the platform at the Merge upgrade, transforming the network from its traditional proof-of-work (PoS) consensus mechanism to proof-of-stakes (PoS). The elimination of ETH trading made the platform left only with BTC trading since then.
The unclear crypto regulations remained one of the major concerns of the broader crypto community. Many crypto executives had raised their voices and asked for clarity for the betterment of the burgeoning asset class. Without crypto regulations, companies tend to walk blindly without an idea when they have defied their legal obligations.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
