Paxful to suspend operation amid regulatory concern, staff exit
Paxful, a global peer-to-peer (P2P) cryptocurrency exchange with operations in Nigeria is suspending its market operation.
Ray Youssef, the CEO of Paxful who made this public in a statement on April 4, 2023, cited regulatory issues and staff departure as key reasons behind the indefinite suspension.
“Regulatory challenges for the industry continue to grow, 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,” Youssef said.
The company, housing over 11 million users, said all customer funds are accounted for, and safeguarding client assets is the exchange’s priority while encouraging them to withdraw and self-custody their assets.
The news came months after LocalBitcoins and LocalCryptos, 2 other key P2P players in Africa, shut down their services amid similar regulatory concerns.
Following the suspension, Paxful joins the list of cryptocurrency exchanges closing shops due to legal issues in the US. Paxful’s regulatory challenges mostly came from the US.
Bittrex, a Seattle-based crypto exchange also recently announced that it is winding down its US operations, citing regulatory challenges as well.
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The P2P Bitcoin exchange recommends that customers use self-custody wallets like Exodus Wallet or Muun Wallet and promise to provide a migration to alternative options for non-US users.
These options include Noones, a new peer-to-peer (P2P) company that focuses on the Global South, and Bitnob, which simplifies the process of buying Bitcoin for Africans.
Youssef has endorsed Noones stating that the platform provides lower trading fees, a less expensive wallet, a more generous affiliate program than Paxful, a more streamlined KYC (Know Your Customer) process, local moderators to handle disputes, and a user-friendly policy that does not involve account lockouts.
Meanwhile, LocalBitcoins announcing its suspension two months ago cited a difficult crypto environment.
“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,” the company said.
The company urges customers to withdraw their funds as soon as possible.
LocalBitcoins had also been trending following allegations by U.S authorities that it was a major partner of Bitzlato, which was shut down by the US Financial Crimes Enforcement Network for being a huge conduit for money laundering and other cybercrimes.