Paxful decides to shut down its exchange citing several reasons
Due to an unclear regulatory environment in the US & fund’s security risk, the Paxful team decided to shut down its crypto exchange.
Paxful was founded by Ray Youssef and Artur Schaback in 2015 as a payment processing platform for brick-and-mortar merchants. Later the company jumped into the Bitcoin-dedicated business and started to provide Bitcoin wallet & Bitcoin P2P trade platform service. In 2018 the company’s business was at a peak level and in the same year, the company introduced a gift card system, as an alternative Bitcoin buy-sell method for the customers, which pushed Bitcoin trade by 64% on the platform.
On 4 April 2023, Paxful CEO Ray Youssef published a message for the Paxful customers and suggested withdrawing all the funds from the Paxful platform to self-custody crypto wallets.
Paxful CEO confirmed that the company is going to terminate its Bitcoin exchange service but Paxful wallet will remain operational.
Youssef said that all the customers’ funds are safe and customers can withdraw anytime. But he failed to explain the real reason why the company decided to close its marketplace but confirmed that Paxful faced regulatory pressure in the US.
As an alternative to Paxful, the company CEO suggested using other service providers like Bitcoin payments company Bitnob and the newly created peer-to-peer marketplace, Noones.
In the early morning, in a Twitter space discussion, Youssef said there were concerns about the safety of customer funds thanks to a lawsuit by Paxful co-founder Artur Schaback. “I couldn’t guarantee the security of the platform,“ Youssef said. ”This is why this thing had to go down.”
Paxful CEO also disclosed that Schaback refused to pay salary to the company’s employees and it was not easy for the company & its employees to handle the situation.
On Twitter, we can see that several Paxful customers are struggling to withdraw their funds.
In Dec 2022, Paxful suspended Ethereum trading on its marketplace citing the ETHEREUM TheMerge event under which the Ethereum network merged with Proof-of-stake (PoS) Beacon chain. Since then Paxful was providing only Bitcoin trading.
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