This is one more company that is in trouble these last months. Paxful has just announced the closure of its marketplace, a decision unexpected by the community. What pushed the CEO Ray Youssef to take this decision?
Paxful closes its marketplace
A message posted by Paxful made the rounds on Twitter yesterday. In it, Ray Youssef announces the closure of his marketplace, and warns that he is not sure that it will return:
Crypto exchange @paxful just suspended their marketplace pic.twitter.com/JRFwUuePN3
– Pledditor (@Pledditor) April 4, 2023
Paxful’s CEO remains evasive on this sudden closure, explaining:
“I can’t give you the full story today, but I can say that we unfortunately had some key people leave our team. “
In a Twitter Space released yesterday, however, Ray Youssef confirmed that it was the departure of a Paxful co-founder, Arthur Schaback, that was the problem. Removed from the company’s leadership more than a year ago, he sued the company, as well as the CEO. This would have led to successive employee departures.
Ray Youssef also explains that the regulatory conditions have become stricter for peer-to-peer exchange platforms “especially in the United States”. Indeed, we recall that the Securities and Exchange Commission (SEC) of the United States has recently filed a lawsuit against the DAO of SushiSwap.
Customer funds are available and can be withdrawn
Paxful CEO tells users their funds are safe, and Paxful’s wallet is operational. So they can withdraw them – Ray Youssef invites them to use self-custody storage solutions. In addition, Ray Youssef advises current users to migrate to competitors of Paxful. In particular, he cites two non-US based platforms: Noones and Bitnob.
This closure of Paxful’s marketplace comes after the company had already delisted Ether (ETH) last December. While the reason appears to be largely based on the legal initiatives of an ex-employee, one should not underestimate the regulatory framework in the United States, which has become much tougher in recent months. The SEC in particular has been hostile to the industry, and its chairman Gary Gensler has just asked the US Congress for an additional $2.4 billion to further regulate the ecosystem.
