- Crypto platform Paxful has shuttered following “key staff departures”
- The peer-to-peer exchange, which launched in 2015, also cited regulatory pressure
- Bittrex also recently closed its U.S. operations
Peer-to-peer crypto platform Paxful has suspended operations following “key staff departures” and the increasingly tough regulator environment after almost eight years of operations. The platform, which operated a little like former peer-to-peer favorite LocalBitcoins, suspended operations yesterday, days after Bittrex ceased all U.S. operations citing the risk to its business from U.S. regulations. The platform reassured users that all their funds were safe and asked them to withdraw to self-storage as soon as possible.
Paxful Enjoyed Crypto Boom
Paxful Inc was established in July 2015 by Ray Youssef and Artur Schaback as a payment processing platform for physical retailers. However, it was later reintroduced as a Bitcoin marketplace, soon shifting towards the then-popular peer-to-peer model which eventually became the core of the company’s service.
Paxful continued to grow until 2018, operating in multiple countries including Venezuela, but in more recent years the country’s peer-to-peer model has been usurped by what we come to know today as typical cryptocurrency exchanges. In 2018 it was also caught up in a Nigerian scam, although it denied involvement.
Regulators Watching Their Efforts Bear Fruit
Youssef posted to the site yesterday to say that it is “suspending its marketplace” and didn’t know when it would be back, adding that the full story could not yet be told:
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.
Youssef added that he was working on a transition to non-U.S. exchanges, but also encouraged users to consider self-custody, especially given the current regulatory climate.
The move from Paxful comes just days after another exchange, Bittrex, shuttered its own U.S. operations, citing the same regulatory challenges. No doubt U.S. authorities will be delighted with these first smaller dominoes falling and will hope that others follow suit to make their jobs easier.