Paxful, one of the world’s largest peer-to-peer (P2P) cryptocurrency exchanges by volume with over 11 million users, is suspending its marketplace, according a statement by CEO, Ray Youssef, dated April 4 2023.
Letter from @paxful CEO @raypaxful pic.twitter.com/oMNWrzL4Fn
— BitKE (@BitcoinKE) April 4, 2023
CEO Ray has cited 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.
Ray said all customer funds are accounted for and the Paxful Wallet will be up for customers to retrieve their funds.
Paxful is suggesting that customers use self-custody wallets such as Exodus Wallet or Muun Wallet. Additionally, the company is providing a migration to alternative options for non-U.S. users. These options include Noones, a new peer-to-peer (P2P) company that focuses on the Global South, and Bitnob, which simplifies the process of buying Bitcoin for Africans.
Youssef has endorsed Noones stating that the platform provides lower trading fees, a less expensive wallet, a more generous affiliate program than Paxful, a more streamlined KYC (Know Your Customer) process, local moderators to handle disputes, and a user-friendly policy that does not involve account lockouts.
Paxful is not the only P2P crypto platform that has had to shut down in recent times.
Paxful’s suspension comes less than two months since rival LocalBitcoins announced that it would be stopping its trading services, citing a difficult crypto environment.
“We are sad to share that, regardless of our efforts to overcome challenges during the ongoing very cold crypto winter, we have regretfully concluded that LocalBitcoins can no longer provide its Bitcoin trading service,” the company said while asking customers to withdraw their funds as soon as possible.
LocalBitcoins had also been on the spot following allegations by U.S authorities that it was a major partner of Bitzlato, which was shut down by the US Financial Crimes Enforcement Network for being a huge conduit for money laundry and other cybercrimes.
In October 2022, another key player, LocalCryptos, wind down its services, also citing an anticipated downtrend in cryptocurrency markets and challenging regulatory developments.
“After five successful years, we have decided to wind down the LocalCryptos platform. This will be a gradual process taking place over the next couple of months. We understand that our loyal users won’t be too happy to hear this news, and we apologize,” LocalCryptos said.
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