On April 4, the peer-to-peer cryptocurrency exchange Paxful announced that it was stopping operations. Ray Youssef, founder and chief executive officer of Paxful, said in a blog post that “important personnel departures” and the regulatory climate prompted the move.
Youssef remarked, “We do not know whether it [the marketplace] will return.” He also said that all client monies are accounted for and requested that consumers remove their cash. The blog post included links to other platforms that Paxful advised non-U.S.-based users to switch to.
Youssef said at a Twitter Spaces meeting that Paxful is an American startup with a focus on the Global South that serves a worldwide audience. He said:
“A quarter of the oo was compliance people […] Even that was not enough to please Uncle Sam.”
In the past five years, he noted, “American regulators have done a terrific job catching up to their speed,” but “the regulators still don’t it. They get more skeptical each day.”
Youssef cited the use of gift cards to onboard customers in Africa without bank accounts as an example of a firm activity that attracted regulatory notice in the United States.
Excluding clients from the United States while carrying on in the same manner as before “might have been a possibility,” provided that “we had the required employees.” Youssef provided his opinion by stating, “From a purely economic standpoint, it makes no sense at all.”
Artur Schaback, the founder of the firm and its former chief operating officer, initiated legal action against the organization in January by filing a complaint in which he identified Youssef and Jude Chidi Ogene as defendants in the claim.
According to the information that is currently accessible on Ogene’s LinkedIn page, he functioned as the chief legal officer of Paxful up until March. The complaint in this case has been kept under wraps until further notice.
Paxful declared on March 29 that it will “shortly” reimburse customers of its Earn programl for the monies that had been frozen by Celsius after its bankruptcy.
