Paxful, Bitcoin platform with 1.5m Nigerian users, shuts down

A United States-based crypto exchange with 1.5m users in Nigeria, Paxful, has shut down its operations.

Paxful CEO, Ray Youseff, made this known via a blog post on Tuesday, April 4.

Nigeria is the biggest market for the New York-headquartered exchange, with 1.5 million users and $1.5 billion worth of bitcoin trades in 2021, while Cameroon has the second-largest visit to Paxful’s website.

Youseff, who blamed the closure on an unfavourable regulatory landscape, directed customers to withdraw their funds from the platform.

Youssef said on a Twitter space that the decision to close the company was made because there were no engineers, compliance team members, or security personnel left at the company.

He also said in a blog post that “regulatory challenges for the industry continue to grow, especially in the peer-to-peer market and most heavily in the US.”

In addition to Paxful’s regulatory and personnel problems, the exchange is also facing a lawsuit from its co-founder and former Chief Operating Officer, Artur Schaback.

Schaback, who was kicked out of the company over a year ago, filed a lawsuit against the company in January 2023.

“My co-founder sued the company and sued me. I have a lawsuit over my head right now,” Crypto Daily quoted Youssef as saying.

While he could not give more information on the lawsuit as Paxful is a nominal defendant in the litigation, he confirmed that the lawsuit was part of the reason the company was short on staff.

He added that they “just couldn’t deal with this guy anymore”.

Paxful is the latest crypto company to shut down operations since the crypto winter hit in 2022.

Besides the crypto winter, regulators are clamping down on crypto startups.

According to Youssef, while regulators might be making progress when it comes to cryptocurrencies, “they still don’t get it”.

He added that they are growing increasingly suspicious of crypto startups.

Binance, the largest crypto exchange in the world, is currently in a legal battle with the Commodity Futures Trading Commission (CFTC).

The commission charged the exchange and its CEO Changpeng Zhao, with willful evasion of federal law and operating an illegal digital asset derivatives exchange.

Paxful is however shutting its doors after seven years and three months of operation.

The Star