Peer-to-Peer Bitcoin Exchange Paxful Announces Suspension Of Operations

TL;DR

• P2P exchange Paxful has suspended its operations amidst regulatory uncertainties in the market. 

• The exchange also saw some key staff leave the company in recent months. 

Paxful Suspends Operations

Paxful, a peer-to-peer (P2P) platform for trading bitcoin (BTC), announced a few hours ago that it is suspending its marketplace. According to a message from CEO Ray Youssef published on its website, the company said it is unsure whether operations will resume.

Youssef, while addressing the company’s users, 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." 

The CEO also cited regulatory challenges in the P2P market and in the United States as one of the reasons why the cryptocurrency exchange is halting its services.

Youssef added that the Paxful Wallet will remain operational, allowing customers to retrieve their funds. The company also encouraged its customers to transition to self-custody or use other service providers. 

This latest development comes after Paxful suspended the trading of ether on its marketplace in December 2022, citing Ethereum’s switch to proof-of-stake as the reason behind the move. 

While talking about this latest development, Youssef said there were concerns about the safety of customer funds due to the lawsuit filed by Paxful co-founder Artur Schaback. The CEO pointed out that he couldn’t guarantee the security of the platform, hence, the reason why Paxful had to go down. He said;

“[Schaback] was pissed, so he sued the company, and his litigation team was really nasty. 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.”

The Paxful CEO also discussed the regulatory challenges in the United States. He stated that;

“We’ve been bending over backward for the past five years to try to comply with the highest standards. The regulators still don’t get it, and it’s painful to see.”