Paxful, a peer-to-peer Bitcoin platform with 1.5 million Nigerian users, has announced that it will cease operations.
Ray Youssef, the company’s co-founder and chief executive officer, made the disclosure in a blog post on Tuesday.
“Today, Paxful will be suspending its marketplace,” he stated. We don’t know whether it will return. Many people probably won’t be prepared for this. Although I am unable to divulge the entire story at this time, I can inform you that we have, regrettably, lost some key employees.
“Also, regulatory challenges for the industry continue to grow,” the company says. “While we work through these issues, we have taken the most secure option and ask you to explore self-custody and trade elsewhere.” This is especially true in the peer-to-peer market, which is prevalent in the United States.
Decrypt, a crypto-focused news website, says that Youssef said in a Twitter Space that 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 also influenced the decision to close the platform.
The company and my co-founder were sued. On Twitter Space, he was quoted as saying, “I have a lawsuit over my head right now.”
However he didn’t name the offended party unequivocally, Youssef was possibly alluding to fellow benefactor Artur Schaback, who documented a claim in Delaware Chancery Court against Youssef in January, in light of a court agenda facilitated on CourtConnect.
Despite the fact that cryptocurrency is illegal in Nigeria, the 2020 Geography of Cryptocurrency Report from Chainalysis ranked Nigeria eighth out of 154 countries in terms of adoption and use.
Recap, a crypto accounting services company, compiled a list of the top 50 cryptocurrency hubs in 2022. The cities of Lagos and Ibadan in Nigeria have also been listed as global cryptocurrency hubs. Nigerian urban areas came to number 14 (Lagos) and 24 (Ibadan) separately.
The use of peer-to-peer technology in Nigeria, pioneered by Paxful, has contributed to the growth of the crypto industry in Nigeria.
In an interview with Business Africa Insider in 2022, the CEO of Paxful stated that Nigeria is the company’s largest market, with over $1.5 billion in revenue to date (since 2015) and 1.5 million users.
Paxful is the latest crypto company to announce its impending demise after promising so much to customers. Paxful acquired unmistakable quality in Nigeria after the National Bank of Nigeria put a limitation on crypto exchanges through true channels.
Numerous individuals began relying on the company for their crypto needs as a result of its P2P nature, which enabled Nigerians to circumvent the ban. The company announced in 2021 that Nigeria was its largest market, accounting for $1.5 billion in sales.
It expressed that it had over 1.5 million clients from Nigeria at that point. That’s what in 2022, the firm said, “Nigeria is our biggest nation in light of exchange volume — More than $760m in exchange volume last year. In Nigeria, we also saw over 6 million successful trades in 2021 or over 16,000 trades per day.
On Wednesday, the business confirmed that there is currently no withdrawal deadline. A spokesperson stated in an email, “The Paxful Wallet is up for users to safely get their funds out of.” Ray revealed that until other users do the same, he will not remove his Bitcoin from the platform.
“There is no timetable, but we will be open as more information becomes available.”
Senator Ihenyen, President of the Stakeholders in the Blockchain Technology Association of Nigeria and General Secretary of the Blockchain Industry Coordinating Committee of Nigeria, stated that the company’s shutdown would have a negative impact on the Nigerian cryptocurrency market.
According to his explanation, “If you observe closely over the last two years, especially with the CBN’s restriction of crypto from the banking industry, the adoption of P2P has been the only viable option into the crypto market.”
“Users of Paxful’s peer-to-peer platform largely trusted it. Since it appears to control a significant market here, I anticipate that this will significantly hinder the expansion of peer-to-peer (P2P) in Nigeria.
He said that self-custody of crypto assets on decentralized exchanges will get more attention, especially since many centralized exchanges have failed badly recently.
Outrage as CBN orders banks to close cryptocurrency traders’ accounts in their systems
Nigerians are currently reacting to the Central Bank of Nigeria’s (CBN) order to close cryptocurrency traders’ accounts in their systems. In a circular distributed to deposit money banks (DMBs), non-bank financial institutions (NBFIs), and other financial institutions, the apex bank provided the directive.