Paxful, a peer-to-peer (P2P) platform crypto trading platform is shutting down its marketplace, signaling the end of an era of the once-loved digital trading platform for thousands of users in Africa and overseas.
According to Paxful co-founder and CEO Ray Youssef in a statement on the platform’s website, “Paxful will be suspending its marketplace. We are not sure if it will come back. This will probably come as a big shock to many.”
Youssef said the firm unfortunately had some key staff departures and was feeling the pinch of regulatory challenges in the industry at large, 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 Paxful Wallet will be up for customers to retrieve their funds.,” he added adding that Paxful’s priority at the moment is safeguarding customer funds by allowing all customers to withdraw their funds or put them in self-custody via platforms such as Exodus Wallet and Muun Wallet and migration to other options for non-U.S. users to platforms like Noones — a new P2P company dedicated to the Global South, Bitnob — who makes it easy for Africans to connect with Bitcoin and Yellow Card.
These move does not come as a surprise as late last year, Paxful suspended the trading of ether on its marketplace to focus on bitcoin trading alone. The firm was also embroiled in a lawsuit by its co-founder Artur Schaback which led to the departure of several of its key staff and security concerns of the platform and the assets traded hence the suspension of trading. Apart from the regulation pains, litigation and the departure of senior level staff, the engineering and compliance teams were also caught in the crossfires. People close to the Paxful allege that the two co-founders have been feuding for sometime now, there have been lapses in its management and there have been cases of illegal drug use at work, including the CEO himself. Paxful co-founders are now in court disputing over the company and a new administrator has been reportedly found to help the company in its new phase of growth minus its co-founders.
In February this year, P2P exchange LocalBitcoins also shut down after nearly eleven years of operation. Founded in 2012, LocalBitcoins was the first peer-to-peer trading platform serving customers in Africa before other platforms opened up to users on the continent.
In a statement, the firm announced, “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. We encourage all customers to withdraw their funds from LocalBitcoins and we ask you to proceed with withdrawing the Bitcoins from your LocalBitcoins wallet. You have 12 months to withdraw, however of course, we encourage you to proceed withdrawing sooner.”
Localbitcoins’ troubles started when US authorities associated it with then Russian-based P2P platform Bitzlato, which was shut down and its founder arrested for fraud and money laundering. Localbitcoins denied the allegations. Anatoly Legkodymov, founder of the crypto exchange Bitzlato, was arrested in Miami, Florida, in connection with a vast money laundering operation, accused of laundering more than $700 million in illicit funds in the past four years.
Legkodymov and his executive team members allegedly operated a high-tech network for known crooks,” including cybercriminals and drug dealers seeking to process dirty money between Bitzlato and Hydra, a popular darknet marketplace which was shuttered by U.S. and German authorities last year.
Away from Bitzlato and LocalBitcoins, another platform, LocalCryptos called it a day late last year after five years in business.
