One of the world’s largest peer-to-peer (P2P) cryptocurrency exchanges by trading volume, Paxful, has announced that it is shutting down its operations. 

The announcement is a shock to users, especially after the exchange recently announced that it was returning funds to users of its Earn program. 

Paxful Shutting Down 

Following the announcement, the peer-to-peer exchange directed users to retrieve their funds from the platform. Ray Youssef, the co-founder, and CEO of Paxful, stated in a blog post regarding the closure, 

“This will probably come as a shock to many. All customer funds are accounted for. Please withdraw them and, if you can, self-custody.”

The blog post cited several operational factors influencing the decision, among them regulatory challenges for the industry and key staff departures. The blog post further added, 

“While I cannot share the full story now, I can say that we, unfortunately, have had some key staff departures. Also, 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.”

The announcement of the closure came just days after Youssef promised that they would be refunding the affected users of the Paxful Earn program. Paxful’s Earn program allowed users to earn a yield on their Bitcoin through a partnership with Celsius. However, Celsius filed for bankruptcy in July 2022. 

Is There A Bigger Reason? 

While nothing was mentioned about it in the blog post, Youssef stated during a Twitter spaces that one of the factors that prompted the shutting down of the platform was a lawsuit. The lawsuit in question was filed by a Paxful co-founder who has sued the firm and Youssef after being kicked out of the company over a year ago. Youssef had said during the interaction, 

“My co-founder sued the company and sued me. I have a laws

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Author: Amara Khatri

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