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Peer-to-Peer Bitcoin Exchange Paxful to Suspend Operations
A message from co-founder and CEO Ray Youssef cited key staff departures and regulatory challenges.
Updated May 9, 2023, 4:11 a.m. Published Apr 4, 2023, 3:16 p.m.
Paxful – a peer-to-peer (P2P) platform for trading bitcoin – is suspending its marketplace, and is unsure whether operations will resume, according to a message from CEO Ray Youssef published on its website.
"This will probably come as a big shock to many," said Youssef. "While I cannot share the full story now, I can say that we unfortunately have had some key staff departures." Youssef also took note of regulatory challenges, particularly in the P2P market and in the U.S.
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The Paxful Wallet, said Youssef, will remain in operation in order for customers to retrieve their funds. Customers are being encouraged to transition to self-custody or use other service providers like Bitcoin payments company Bitnob and newly created peer-to-peer marketplace, Noones.
In December, Paxful suspended the trading of ether on the marketplace, 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.
Speaking on Twitter Spaces following this morning's surprising announcement, 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.”
“[Schaback] was pissed, so he sued the company and his litigation team was really nasty,” Youssef said. “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.”
Schaback couldn’t be reached for a request for comment from CoinDesk.
Youssef also voiced his frustration with U.S. 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.”
Update (April 4, 2023 16:25 UTC): Adds more details and quotes from Paxful CEO Ray Youssef.
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