Paxful Reopens A Month After Its Closure

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What- Paxful reopens its services after its abrupt shutdown
Why- This is due to a legal dispute between Paxful’s co-founders, which disrupted the exchange’s operations
What Next- The platform we’ll be gradually restoring functionality to the marketplace

The peer-to-peer Bitcoin marketplace, Paxful, is back online, a month after it shut down. Previously, the platform suddenly closed due to a battle for control of the company by the two co-founders after they accused each other of the case. However, most former employees noted through various media outlets that the co-founders’ relationship had been troubled for a while. Notably, company’s business suffered a severe decline in management professionalism.

𝐁𝐑𝐄𝐀𝐊𝐈𝐍𝐆 𝐍𝐄𝐖𝐒: Paxful is back online.

Over the next couple of days, we'll be gradually restoring functionality to the marketplace.

Thank you to everyone for your support!

🧡 https://t.co/UApEgHxLg5

— Paxful (@paxful) May 8, 2023

On May 8, the platform revealed that it would reopen its services. Further, the company noted:

Over the next couple of days, we’ll gradually restore functionality to the marketplace.

Nonetheless, the platform noted that its team has been working diligently to get the marketplace back online, with the safety and security of users paramount. However, it did not provide an update on the firm’s leadership or ongoing lawsuit. The sudden reopening of Paxful has surprised some industry participants.

However, some users have complained that their accounts have been banned. Conversely, Paxful has asserted that “the company will never restrict an account for no reason. The accounts only get restricted when their moderators suspect or identify a violation of the company’s terms and services.”

Hi, @mwangangimwendw. Paxful will never restrict an account for no reason. Accounts only get restricted when our moderators suspect or identify a violation of our Terms of Service, which you can read here: https://t.co/VxrNAl1BxV. (1/2)

— Paxful (@paxful) May 9, 2023

A custodian currently owns Paxful.

Paxful was shut down in April due to claims filed by one of the co-founders, Artur Schaback, against the presiding CEO and another co-founder, Ray Youssef, in January this year. While Schaback hoped for the P2P exchange to resume operations, Youssef recommended new providers to Paxful users. On April 10, a judge on Delaware Chancery Court appointed a legal custodian to oversee Paxful withdrawals for safeguarding customer funds.

However, as per sources familiar with the matter, the platform is currently under the management of a custodian. The custodian acts as a company director and “tie-breaker” alongside Ray Youssef and Artur Schaback.

Ray Youssef resigned from his position in Paxful following the dispute and dissolution of the exchange on April 21. He contributed his company shares to a fund to compensate the Paxful clients. However, the platform restored access to 88% of funds by April 17. Around $4.4 million remained frozen due to a legal conflict between the co-founders. This occurred as one party refused to pay the compliance costs needed to unlock the funds.

Paxful has over 6 million registered users and has facilitated over $6 billion in trades since its launch in 2015, with significant popularity in South America, Africa, and India.

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