Paxful, one of the most popular peer-to-peer Bitcoin platforms in Africa, has announced that it is shutting down its business after eight years of operation.
According to a blog post by Paxful co-founder and CEO Ray Youssef, the main reasons for the closure are regulatory challenges for the industry, key staff departures, and a lawsuit filed by another co-founder, Artur Schaback, who claims he was kicked out of the company more than a year ago. Youssef said that he has a lawsuit over his head right now and that he had no choice but to take action.
Advice To Withdraw Funds
Paxful advised its customers to withdraw their funds from the platform as soon as possible and suggested other platforms for non-US users where they might migrate to and continue using as a similar service.
Youssef also promised to refund the customers who had used Paxful Earn, a service that allowed them to earn interest on Bitcoin through a partnership with Celsius, a crypto lending platform that filed for bankruptcy last year.
By The Numbers
- Paxful was launched in 2015 as a peer-to-peer platform that enabled users to trade Bitcoin with each other using over 350 payment methods, including bank transfers, online wallets, gift cards, and cash.
- The platform was especially popular in Africa, where it had over 6 million users and facilitated over $1.6 billion worth of trades in 2022.
- Paxful claimed to be building a financial system for the 100%, empowering people who had limited access to traditional financial services.
Challenges
Paxful faced several challenges and controversies during its operation. The platform had to deal with fraud, scams, and hacks that affected its reputation and security. It also had to comply with various regulations and restrictions in different jurisdictions, especially in Nigeria, its biggest market, where the central bank banned banks from servicing crypto exchanges earlier this year.
Moreover, Paxful had to compete with other peer-to-peer platforms such as LocalBitcoins and Binance P2P, which offered lower fees and more features.
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