Paxful, a Peer-to-peer cryptocurrency marketplace, has shut down. This suspension of operations was announced by Paxful founder and CEO Ray Youssef said in a blog.
He blamed “key staff departures” and the regulatory environment for the surprising and shocking decision.
“We are not sure if it [the marketplace] will come back,” Youssef wrote. He added that all customer funds are accounted for and asked customers to withdraw their funds. The blog post provided links to other platforms that Paxful suggested for non-U.S. users to migrate to.
Youssef pointed to practices such as using gift cards to onboard people in Africa without bank accounts as an example of the company’s activities that drew regulatory attention in the United States.
Blocking U.S. customers and continuing operations “would have been an option if we had the staff. […] Business-wise it doesn’t make sense,” Youssef said.
In addition to its problems with staff departures, the company is in a legal dispute with co-founder and former chief operating officer Artur Schaback, who sued the company in January, naming Youssef and Jude Chidi Ogene as defendants. Ogene was Paxful’s chief legal officer until March, according to his LinkedIn profile. The complaint, in that case, has been sealed.
Paxful announced on March 29 that the company was refunding its Earn program users the funds that had been locked up in Celsius after its bankruptcy “in the coming days.”
