Peer-to-peer Bitcoin marketplace Paxful has announced that it will shut down, directing users to retrieve their funds from its platform.

“This will probably come as a shock to many,” Paxful co-founder and CEO Ray Youssef wrote in a blog post. “All customer funds are accounted for. Please withdraw them and, if you can, self-custody.”

The blog post cited “key staff departures” and “regulatory challenges for the industry,” but Youssef said during a Twitter space on Tuesday that the decision to close the platform was also influenced by a lawsuit brought by a Paxful co-founder who is suing Paxful and Youssef after being “kicked out of the company” more than a year ago.

“My co-founder sued the company and sued me,” Youssef said. “I have a lawsuit over my head right now.”

Though he did not name the plaintiff explicitly, Youssef is likely referring to co-founder Artur Schaback, who filed a lawsuit in Delaware Chancery Court against Youssef in January, according to a court docket hosted on CourtConnect. 

Schaback could not be reached for comment by Decrypt.

“Paxful is a nominal defendant in the litigation, so we cannot share much around the case,” a Paxful spokesperson told Decrypt, also declining to identify the plaintiff. “But I can confirm that Artur Schaback is a co-founder and current board member of Paxful.”

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Author: André Beganski

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