Peer-to-peer Bitcoin platform, Paxful, with 1.5m users in Nigeria, has announced that it is shutting down its operations.
This was disclosed by the co-founder and Chief Executive Officer, Ray Youssef, in a blog post on Tuesday.
He said, “Today, 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. 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.
— Pledditor (@Pledditor) April 4, 2023
The Paxful CEO also recommended some alternatives for customers, including the option to self-custody their funds or trade elsewhere.
Youssef suggested non-U.S. customers could use Noones, a new P2P company serving the global south crypto market, and Bitnob, which is mostly used by crypto traders on the African continent. For U.S. users, he advised them to wait for further updates from Paxful.
According to Decrypt, Youssef, during a Twitter Space said that the decision to close the platform was also influenced by a lawsuit brought by a Paxful co-founder who is suing Paxful and Youssef after being “kicked out of the company” over a year ago.
“My co-founder sued the company and sued me. I have a lawsuit over my head right now,” he was quoted as saying on the Twitter Space.
Though he did not name the plaintiff explicitly, Youssef is likely referring to co-founder Artur Schaback, who filed a lawsuit in Delaware Chancery Court against Youssef in January, based on a court docket hosted on CourtConnect.
The suspension comes after Paxful had been struggling to process withdrawals for the past few weeks and blaming it on BitGo, a third-party service provider that handles transactions for Paxful.
According to a tweet by @Pledditor, a Paxful user, on March 16, 2023, Paxful had been delaying withdrawals for over 24 hours and giving vague explanations about BitGo’s issues.
Paxful is credited with pioneering the use of peer-to-peer technology in the country, thus helping to expand the crypto industry in Nigeria.
In an interview with Business Africa Insider in 2022, Paxful’s CEO said that Nigeria is the firm’s largest market, with 1.5 million users and over $1.5 billion volume to date (since 2015).