Paxful, a well-known peer-to-peer (P2P) trading platform, has recently announced its decision to shut down its marketplace and requested users to withdraw their funds. This comes at a time when the cryptocurrency industry is gradually recovering from a year-long slump.
In a statement released on Tuesday, Ray Youssef, Paxful’s co-founder and CEO, revealed that the company had experienced some major staff departures. However, he did not provide any further details on what caused them.
Mr. Youssef also highlighted the increasing regulatory challenges in the P2P market, particularly in the US, which have added to the company’s difficulties. He urged users to move their funds to a more secure location and trade elsewhere.
During a Twitter Space session, Youssef revealed that one of the company’s co-founders had filed a lawsuit against him and Paxful, which had led to the departure of all senior-level staff. The co-founder had allegedly refused to pay engineers and compliance personnel, leaving the company with a $6 million compliance bill.
By Friday of the same week, Youssef stated that the company had no operational staff left, and he made the difficult decision to shut down the platform. Despite facing a court order that prevented him from taking such action, he believed that it was the ethically responsible choice.
Youssef stated that he could not deceive users into believing that their funds were safe when they were not. As a result, he made the decision to close down the platform, emphasizing the importance of self-custody and finding a safer place to trade.