Paxful is a P2P(Peer-to-peer) bitcoin marketplace that was formerly known as EasyBitz. The firm is based in the United States but has other offices in Manila, Hong Kong and Tallinn. The platform is currently the second largest P2P bitcoin marketplace by trading volume after LocalBitcoin. The firm was founded in 2015 by Ray Youssef and Artur Schaback. The former doubles as Paxful’s CEO while the latter also doubles as the COO for the platform. The platform facilitates the purchasing and selling of Bitcoin with over 350 payment solutions and an ecosystem of more than 10 million users. These methods include bank transfers, Online wallets like Paypal and M-pesa, debit and credit cards, gift cards, other digital currencies like Ethereum, cash payments and even goods and services – people have bought Bitcoin with cars and much more. The platform currently has more than 12 000 verified sellers, over 12 000 active offers and over 6 million active users globally.
Despite the success the platform has achieved, it has recently announced its plans to shut down. This comes as a shock to many as Mr. Youssef confirmed that all the customer funds are safe. The co-founder has also urged all users to withdraw their funds and keep custody. The anticipated closure comes 2 months after LocalBitcoin announced plans to close shop. Many among the crypto community are wondering whether this is indicative of a dwindling p2p market. LocalBitcoin cited the ongoing crypto winter as the reason for its shutdown. It had been in operation for 10 years and was among the first p2p trading platforms to open its doors to the public. LocalBitcoin has since suspended new signups and as of February the 17th, the only function users can execute is the withdrawal of their funds. The platform however gave its users a period of 12 months to retrieve their funds from the platform.
Paxful on the other hand, has cited regulatory issues among other reasons for closing shop. Mr. Youssef also revealed that a recent lawsuit filed by a paxful co-founder has driven away all of the platform’s senior staff. While the CEO is not sure whether the platform will come back, he has confirmed that the Paxful wallet is still up to facilitate customers to retrieve their funds among other reasons. Following the planned shutdown, the platform is facilitating migrations for customers based outside the US to other platforms like Noones – a new P2P company operating in the global south. While rooting for Noones, Mr. Youseff has said that it provides almost all of the services that Paxful offers with numerous benefits including lower trading fees, it is one of the cheapest wallets and an affiliate program that is even more generous the one at Paxful. Noones also offers local dispute moderators, a more efficient KYC(Know Your Customer) process and a much friendlier TOS(Terms Of Service) policy that does not require locking of user accounts. Mr. Youssef also said that he personally vouches for Noones and that users could trust them. Apart from Noones, Paxful is also offering easy migration to Bitnob – a platform that makes it easier for Africans to connect with Bitcoin.
Mr. Youssef went ahead to reveal that his co-founder decided to sue him and the company. Though he never mentioned the plaintiff explicitly, a lawsuit was filed in a Delaware court by Artur Schaback(Co-founder of Paxful) against Mr. Youssef and according to the court documents, Paxful has been named as a nominal defendant in the litigation. This comes even after Paxful had plans to add more features to its platform. The platform had partnered with Celsius to facilitate its customers to earn a yield from their Bitcoin. In the past week, the platform reported a trading volume of $35 million in its trading services offered to users in Kenya, India and Argentina.
