Bitcoin peer-to-peer (P2P) trading platform Paxful announced a temporary suspension of operations on Tuesday, citing internal and regulatory challenges. The future of the platform remains uncertain.
Key Points of the Suspension
- Leadership turmoil: CEO Ray Youssef revealed that critical employees had departed, though he refrained from providing specific details.
- Regulatory pressures: Youssef highlighted significant compliance challenges, particularly in P2P markets and U.S. operations.
- Fund security: While Paxful wallets remain operational for withdrawals, Youssef advised users to transition funds to self-custody or alternative platforms like Bitnob and Noones.
Behind-the-Scenes Legal Battle
The suspension follows a lawsuit filed by co-founder Artur Schaback, which Youssef claims has:
👉 Compromised platform security
"His legal team drove away our senior staff and withheld payments from engineers and compliance teams," Youssef stated during a Twitter Spaces session.
Platform Background
- Founded: 2015
- User base: Over 9 million globally (2022 data)
- Achievements: Recognized by TIME Magazine as one of the year's most influential companies
- Recent changes: Ethereum trading halted in December 2022, leaving only Bitcoin transactions
Industry Context
Paxful becomes the second major P2P crypto marketplace to falter in 2023, following LocalBitcoins' closure in February after a decade-long run.
Frequently Asked Questions
Q: Can users still access their funds?
A: Yes, wallet withdrawals remain functional during the suspension.
Q: What alternatives does Paxful recommend?
A: Bitnob for payments and Noones as a new P2P marketplace.
Q: What caused the employee exodus?
A: Primarily linked to the co-founder's lawsuit and resulting operational disruptions.
Transition Recommendations
For affected users:
- Withdraw funds promptly
- Consider non-custodial wallets for future transactions
- Research alternative platforms thoroughly
👉 Explore secure cryptocurrency options
The crypto community watches closely as one of P2P's pioneering platforms faces its greatest challenge.
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