CRYPTO EXCHANGE | Paxful Reportedly Headed Toward Closure with Poor State of Affairs

Paxful is reportedly headed towards a permanent closure, few months since May 2023 when the P2P Bitcoin announced it was resuming services.

The resumption followed an abrupt move in April 2023 to shut down the once popular marketplace, with CEO, Ray Youssef, who has since cut ties with Paxful and taken up CivKit, blaming key staff departures and regulatory challenges in the industry as reasons behind the decision.

“Regulatory challenges for the industry continue to grow, especially in the peer-to-peer market and most heavily in the U.S. While we work through these issues, we have taken the most secure option and ask you to explore self-custody and trade elsewhere,” Youssef said at the time.

In addition to the official statements, there were also reports of a rift involving Co-Founder, Artur Schaback, who was said to be suing the company for wrongful termination among other reasons.

 Paxful’s newly appointed CEO, Roshan Dharia

The latest reports come from Technext publication which spoke to a source within the company.

The reports indicate that the company has struggled to do well and is still facing difficult challenges, which have prevented it from delivering services to its customers effectively. There have been several complaints posted on its social media platforms by customers who have expressed concerns about issues such as difficulties in making withdrawals, unresolved disputes, and allegations of fraudulent activities.

According to the Technext publication, the company is reportedly running at a loss and is now digging into its users funds to pay legal bills. The company is operating with just one compliance officer, in contrast to the over 80 officers it previously had. This could compromise its safety and compliance standards.

There is also a shortage of capacity in the engineering team as old engineers are yet to be paid, which has contributed to the recent withdrawal issues.

If that were not enough a New York court has recently issued a default judgment against Paxful, stating that the company owes $4.7 million, along with an additional $3 million to contractors.

Paxful is also said to be experiencing a decline in trading volumes, which is likely impacting its revenue from trades.

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