Peer-to-peer cryptocurrency marketplace Paxful announced the suspension of operations on April 4. Paxful founder and CEO Ray Youssef said in a blog post that "key employee departures" and the regulatory environment were behind the decision.
"We're not sure it [the market] will come back," Yusuf wrote. He added that all client funds had been credited and clients were asked to withdraw their funds. The blog post provides links to other platforms that Paxful recommends that non-US users migrate to. Youssef said at the Twitter Spaces meetup that Paxful is an American company that serves a global audience, mostly in the Global South. He said: "A quarter of the company is a compliance person and even that is not enough to please Uncle Sam."
Youssef added: “Over the past five years, U.S. regulators have done a good job of catching up” but “regulators still don’t realize this. They’re getting more suspicious every day.” Youssef pointed to practices such as the use of gift cards to board unbanked Africans as examples of the company's activities in the United States that have drawn attention from regulators.
Blocking U.S. customers and continuing to operate “would have been an option if we had employees. From a business perspective, it didn’t make sense,” Yusuf said.
In addition to the employee departure issue, the company is also in a legal battle with co-founder and former chief operating officer Artur Schaback, who sued the company in January, naming Youssef and Jude Chidi Ogene as defendants. Ogene served as Paxful's chief legal officer until March, according to his LinkedIn profile. The complaint in the case has been sealed. Paxful announced on March 29 that it will refund funds locked in Celsius after its bankruptcy to users of its Earn plan in the “coming days.”
