PAXFUL PACKS HOME
Updated: Jun 8
- Announcement
- Reasons behind the closure
- Double Whammy
The peer-to-peer Bitcoin exchange Paxful announced its closure on 4th April 2023. In the announcement, the company directed the users to retrieve the funds from the platform and encouraged self-custody as a measure of storage.
Reasons behind closure
The blog post cited :
REGULATORY PRESSURE
KEY STAFF DEPARTURE
Double whammy: Lawsuit
The actual reason behind the closure
A co-founder who was kicked out of the company a year ago decided to sue Paxful and Ray Youseff. This information was disclosed by Ray Youseff in Twitter Space. However, it based on evidence obtained from the court docket hosted on CourtConnect, it was clear that Artur Schaback was the one who filed the lawsuit against Paxful and Ray Youseff on 11th January 2023.
Double Whammy: The Promise
The closure announcement came days after Paxful promised its Earn customers whole. Earn is a partnership program with the now Bankrupt Celsius, where Paxful customers get to earn a yield on Bitcoin.
Despite the announcement of closure, the wallet operation will remain functioning until all customers safely remove their funds.
Ray Youssef claimed that the lawsuit drove all the crucial senior employees out of the company. He added that the co-founder refused to pay some of Paxful's employees. The pressure from the co-founder's litigation team made the senior staff quit. It got to a point where, no engineers, compliance team members, or security staff were left in the company. Ultimately, he decided to shut down the company.
Reference:
Beganski, A. (2023) Bitcoin Marketplace Paxful to shut down amid legal battle with co-founder, Decrypt. Decrypt. Available at: https://decrypt.co/125411/paxful-bitcoin-marketplace-closure-cofounder-lawsuit (Accessed: April 6, 2023).