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The eight-year-long-running Bitcoin marketplace Paxful yesterday on 4th April, announced that they are suspending their business operations with no certainty of coming back and further directed customers to retrieve their funds from its platform. The announcement was made abruptly amid Binance FUDs, raising questions about the viability of P2P systems.
Acknowledging that it may come as a shock to many, Ray Youssef, Founder and CEO of Paxful, said they could not share the full reason and story behind this step. Youssef, in the official statement, assured that “All customer funds are accounted for. Please withdraw them and, if you can, self-custody.”
The full message from Ray can be viewed here.
Nevertheless, Ray Youssef is already working to gain support for a new platform called Civ Kit, a P2P decentralised Bitcoin trading application based on the Nostr, which is a simplified, open protocol that makes it possible to create a truly global, censorship-resistant social network funded by Jack Dorsey.
Sudden Closure of Paxful
Just a few days after Youssef pledged to compensate Paxful Earn consumers, Paxful announced its liquidation. Paxful customers were able to profit from their Bitcoin investments through a partnership with Celsius, a well-known cryptocurrency lender that filed for bankruptcy in July of last year.
The official statement reasoned “regulatory challenges” and “key staff departures” for such sudden closure, but Youssef claimed during a Twitter session that a lawsuit filed by a Artur Schaback, Paxful co-founder suing Paxful and Youssef after being “kicked out of the company” about one year ago also had an impact on the decision to shut down the platform.
Youssef asserted that the anonymous co-legal founder’s team’s actions were largely responsible for Paxful’s senior staff leaving the company. The co-founder, Youssef continued, refused to pay some of Paxful’s employees.
Youssef claimed that by the last Friday, there were no employees of the compliance team, engineers, or any security people employed by their business. In the end of, he stated that he decided to shut down the company at that time for security reasons.
Paxful Founder, Ray Youssel under Multiple law Suits
Along with issues with key employees leaving, the business is also caught between in a legal battle with co-founder and former COO, who filed a lawsuit against the business in January and called for Youssef and Jude Chidi Ogene, who had served as Paxful’s chief legal officer in the suit. In that situation, the complaint was sealed.
Youssel in a Twitter Space had disclosed that the company and co-founder both had sued him and he has a lawsuit to look over right now. According to a court docket report provided on CourtConnect, Youssef is most likely pointing to the co-founder Artur Schaback, known to have sued Youssef in the Court of Chancery in January.
Until March, A Paxful representative told that the company was one of the defendants in the lawsuit, so they couldn’t disclose many details about it.
Paxful Assures Secure Refund
Just a few days prior Youssef had pledged to compensate Paxful Earn consumers, Paxful announced its liquidation.
Despite the company’s sudden collapse, the Paxful spokesman told that “users may withdraw their monies out safely” and that the wallet is active. Around 11 million customers are served by the firm, which claims that all customer funds are tracked and that protecting client assets is the exchange’s top priority while urging users to withdraw and take control of their own holdings.
For the time being, Paxful advises users to transfer money to non-custodial wallets or websites, such as the recently launched Noones, a P2P Bitcoin exchange, which Yusuf Nessary and Nicholas Gregory have co-founded. Youssef claims to support this new venture, Noones, but plays no active part in the business.
In addition, Yusuf is also the director and co-founder of Built With Bitcoin (BWB), a nonprofit that receives funding from Paxful and aims to offer “humanitarian support, powered by Bitcoin.”
Youssef calls Civ Kit the Next in line
Youssef claims that the shutdown of Paxful, a Delaware firm, was caused by internal strife and regulatory pressure, and that Civ Kit will be “the next generation of Bitcoin.”
Civilization Kit (Civ Kit) will be distinct from Noones and Paxful in addition to being built on Nostr because it will allow anyone to construct a decentralised Bitcoin-based marketplace on top of Civilization Kit. A network of decentralised, non-custodial Bitcoin marketplaces is what is envisioned.
About Paxful
Paxful, which was first established in 2015, is the most recent company to falter in the midst of the crypto cold. According to a press release, the business is based in New York and also maintains operations in Estonia, the Philippines, and Russia. Since 2015, the company has rapidly grown and made a name for itself as a popular international marketplace for buying and selling Bitcoin. Investors were previously cautioned by Paxful CEO not to leave valuable coins on an exchange.
Paxful is compared by Youssef to Craigslist for cryptocurrencies. Users exchanged Bitcoin for cash, gift cards, mobile money, and other forms of money on a peer-to-peer basis. Paxful charged for escrow and dispute resolution services.
The main stablecoin Tether and the two biggest cryptocurrencies by market capitalization, Bitcoin and Ethereum, were once traded by consumers through the firm. Yet in December of last year, the corporation stopped supporting Ethereum.
According to Youssef, Paxful ultimately succeeded in encouraging the adoption of Bitcoin in Africa and other parts of the Global South. Users from Argentina, Kenya, and India also made up the majority of the $35 million in trade volume on Paxful during the course of the previous week.
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