Paxful Suspends Operations Amid Founders’ Clash, Regulatory Hurdles
By Adedapo Adesanya
A peer-to-peer (P2P) cryptocurrency platform, Paxful, is suspending its marketplace and will likely not resume operations again, a notice signed by its CEO, Mr Ray Youssef, published on its website, disclosed.
In the disclosure seen by Business Post, he said, “This will probably come as a big shock to many. While I cannot share the full story now, I can say that we, unfortunately, have had some key staff departures.”
Mr Youssef also blamed the regulatory challenges, particularly in the P2P market and in the US market.
He said the Paxful Wallet would remain in operation in order for customers to retrieve their funds, encouraging customers with tokens to transition to self-custody or use other service providers like Bitcoin payments company Bitnob, Yellowcard, and newly created peer-to-peer marketplace, Noones.
This is the latest development after Paxful suspended the trading of Ethereum (ETH) on the marketplace in December, citing the network’s switch to proof-of-stake from proof-of-work as a reason for the move.
Since then, the platform has only been trading Bitcoin (BTC).
According to CoinDesk on Twitter Spaces this morning, Mr Youssef expressed concerns about the safety of customer funds thanks to a lawsuit by Paxful co-founder, Mr Artur Schaback.
“I couldn’t guarantee the security of the platform,“ Mr Youssef said. ”This is why this thing had to go down.”
“[Schaback] was pissed, so he sued the company, and his litigation team was really nasty,” Mr Youssef revealed.
“They drove away all of our senior-level staff. They just couldn’t deal with this guy anymore, and then he refused to pay our engineers, and he refused to pay our compliance.”
Mr Youssef also voiced his frustration with US regulators.
“We’ve been bending over backwards for the past five years to try to comply with the highest standards,” he said. “The regulators still don’t get it, and it’s painful to see.”