​Paxful CEO announces the closure of the P2P platform

What’s new? Paxful CEO Ray Youssef has announced that the P2P platform is shutting down indefinitely. He cited layoffs of a number of key employees and increased pressure on the industry from US regulators as the main reasons. In his message, Youssef asked users to explore self-custody and trading on other platforms. “We are not sure if it will come back,” he added.

Message on the Paxful website

What is known about the platform? It is an international peer-to-peer (P2P) cryptocurrency trading platform, founded in 2015, where users can independently specify the price they want to buy digital assets for. It has more than 6 million users.

What other changes are waiting for users? Withdrawals and the Paxful Wallet will continue to be available so customers can get their funds. Youssef recommends transferring them to wallets such as Exodus Wallet and Muun. For users who are not in the US, an easy switch to Noones, a new P2P platform focused on the Global South, is suggested.

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Finding new solutions. Youssef is also supporting Civilization Kit (Civ Kit), a decentralized bitcoin P2P trading platform, which will allow users to create their own decentralized marketplaces. The project’s White Paper will be published within two weeks. Youssef calls Civ Kit “the next evolution of Bitcoin” and plans to involve community members in creating and funding the new project.

In an interview with CoinDesk, Youssef spoke out about the reasons behind Paxful’s closure, mentioning regulatory pressure and internal contradictions within the company:

“We spent millions on compliance, but even that still wasn’t enough. And then to make things worse, in the middle of January, my co-founder decided to sue the company and myself. The litigation got really nasty and he scared away our best people. My entire chief level staff resigned. I had no operational staff.”

Last week, Paxful co-founder Artur Schaback accused Youssef of hiding business dealings and making fraudulent transfers. Youssef stressed that Schaback himself was legally fired more than a year ago for incompetence and improper behavior, refusing to participate in an internal investigation.

In December, Ethereum cryptocurrency was removed from Paxful, one of the reasons being that the network switched to the PoS algorithm. Youssef said at the time that the PoW mechanism was an innovation that made bitcoin “the only honest money,” while PoS turned ETH into a digital form of fiat money.

Paxful was previously ranked as one of the 100 most influential firms of 2022 by TIME magazine. The platform made the list along with crypto companies such as OpenSea, Together Labs, and The Sandbox.