Paxful, an eight-year-old Bitcoin marketplace, said on April 4th, that it is halting operations with no guarantee of resumption and advised consumers to reclaim their cash from its site. The statement was made hastily amid Binance FUD, creating concerns about the sustainability of P2P networks.
Recognizing that this may come as a surprise to many, Ray Youssef, Founder and CEO of Paxful, stated that they could not divulge the whole rationale and explanation behind this decision. In the official statement, Youssef stated that « all customer funds are accounted for. » Please withdraw them and, if possible, self-custody. »
The Nostr is a streamlined, open protocol that enables the creation of a truly global, censorship-resistant social network funded by Jack Dorsey, and Ray Youssef is already working to win support for it. Civ Kit is a P2P decentralized Bitcoin trading application built on this protocol.
Paxful’s Unexpected Closure
The announcement of Paxful’s insolvency came only a few days after Youssef promised to reimburse Paxful Earn users. Through a collaboration with Celsius, a well-known cryptocurrency lender that declared bankruptcy in July of last year, Paxful users were able to make money on their investments in Bitcoin.
Youssef claimed on Twitter that a lawsuit filed by Artur Schaback, a co-founder of Paxful, who sued Paxful and Youssef after being « kicked out of the company » about a year ago, also had an impact on the decision to shut down the platform. The official statement cited « regulatory challenges » and « key staff departures » as reasons for the abrupt closure.
Youssef said that the top personnel at Paxful primarily left the firm as a result of the activities of the team of the unidentified co-legal founder. Youssef stated,
The co-founder refused to pay some of Paxful’s employees.
According to Youssef, their company had no engineers, compliance team staff, or security personnel as of last Friday. He concluded by saying he had made the decision to close the business at that time for security concerns.
Ray Youssel, the founder of Paxful, is being sued repeatedly
Along with problems with key workers quitting, the company is also embroiled in a legal dispute with its co-founder and former COO, who sued the company in January and requested the participation of Youssef and Jude Chidi Ogene, who had served as Paxful’s chief legal officer. The complaint was sealed in that case.
Youssel revealed on Twitter that he is currently the subject of a lawsuit that his firm and co-founder have both filed against him. Youssef is probably referring to the co-founder Artur Schaback, who is known to have sued Youssef in the Court of Chancery in January, according to a court docket record available on CourtConnect.
As one of the defendants in the litigation as of March, according to a Paxful spokesman, the firm was unable to provide much specifics.
Paxful Guarantees Safe Refund
Paxful announced its collapse just a few days after Youssef promised to reimburse Paxful Earn customers.
Despite the company’s abrupt demise, a Paxful spokeswoman assured customers that they could « safely withdraw their money » and that the wallet was still functional. The company, which serves around 11 million clients, asserts that all client money are tracked and that safeguarding client assets is the exchange’s first concern while advising clients to withdraw and take ownership of their own holdings.
Paxful suggests users move funds to non-custodial wallets or websites for the time being, including the just-launched Noones P2P Bitcoin exchange, which Yusuf Nessary and Nicholas Gregory co-founded. Even though Youssef professes to support Noones, he takes no active role in the company.
Additionally, Yusuf is the co-founder and director of Built With Bitcoin (BWB), a charity organization that gets financing from Paxful and promotes « humanitarian support, powered by Bitcoin. »
Youssef identifies Civ Kit as the following in line
Youssef contends that Paxful, a Delaware company, was shut down due to internal conflict and governmental pressure, and that Civ Kit would be « the next generation of Bitcoin. »
Civilization Kit (Civ Kit) will be separate from Noones and Paxful in addition to being built on Nostr since it will let anybody to build a decentralized Bitcoin-based marketplace on top of Civilization Kit. It is intended to create a network of decentralized, non-custodial Bitcoin markets.
Concerning Paxful
The most recent business to fail in the middle of the crypto cold is Paxful, which was founded in 2015. The company, which has its headquarters in New York, also maintains operations in Russia, the Philippines, and Estonia, according to a news statement. Since 2015, the business has developed quickly and established a reputation as a well-liked global marketplace for buying and selling Bitcoin. Paxful CEO earlier warned investors not to leave precious coins on an exchange.
Youssef compares Paxful to Craigslist for digital currency. Peer-to-peer transactions between users allowed them to swap Bitcoin for cash, gift cards, mobile money, and other types of money. For escrow and dispute resolution services, Paxful charged.
Customers formerly exchanged Bitcoin and Ethereum through the company, as well as the key stablecoin Tether and the two largest cryptocurrencies by market capitalization. However, the company ceased promoting Ethereum in December of the previous year.
Youssef claims that Paxful was ultimately successful in promoting the use of Bitcoin in Africa and other regions of the Global South. The majority of the $35 million in transaction volume on Paxful over the course of the preceding week also came from users in Argentina, Kenya, and India.
