By
Chimamanda U. Martha
April 18th, 2024
The news further narrows the options for people to trade cryptocurrency among themselves.
The global peer-to-peer (P2P) market is fast losing popularity and Paxful may be the latest platform to be affected by this reality. According to a blog post by Paxful CEO Ray Youssef, the firm is winding down its operations immediately with no assurance of resuming them ever again. The eye-catching introduction reads:
“Today, Paxful will be suspending its marketplace. We are not sure if it will come back.”
While Youssef admits that the news may come as a big shock to many, shutting down is now gradually becoming a trend among pure P2P platforms. For what it’s worth, the Paxful news comes barely two months after LocalBitcoins February closure, further narrowing the options for people to trade cryptocurrency among themselves.
Meanwhile, it is worth noting that unlike Binance and other exchanges that offer P2P trading, Paxful and LocalBitcoin were one of the few pure-play P2P outfits.
P2P Platform Paxful Bemoans Regulatory Challenges
According to Youssef, one of the main reasons why Paxful is exiting the P2P market scene is the state of regulation in the industry. The CEO notes that the regulatory scene is quite challenging and it would be best to suspend operations while it works through the issues.
Furthermore, Youssef claims that the platform has recorded increased departure of staff members, especially those at the executive level. However, their departure is largely due to a lawsuit filed by a Paxful co-founder, he says.
By shutting down, Youssef believes Paxful will have the time to sort issues. But in the interim, he has advised users of the platform to take their trades elsewhere. He wrote:
“While we work through these issues, we have taken the most secure option and ask you to explore self-custody and trade elsewhere.”
Considering the above statement, it might be safe to say that customer funds are all accounted for.
Privacy Issues
Without a doubt, the shutdown of LocalBitcoins and Paxful will make peer-to-peer Bitcoin trading a lot more difficult. Especially with respect to privacy. While there are still some P2P platforms out there, users can no longer trade Bitcoin with as much ease and privacy as before. And the alternative is to carry out their trades under the supervision of exchanges.
Paxful was launched in 2015 and quickly rose to popularity, especially in Nigeria, China, India, Kenya, and the US. As of 2022, it already boasted nearly 9 million global users.