P2P Bitcoin Marketplace Paxful Resumes Operations After Sudden Closure

Peer-to-peer Bitcoin trading platform Paxful has finally resumed its operations after an abrupt halt last month. A wave of legal battles between the founders of the exchange led to the platform’s closure.

What Happened?

In January, Artur Schaback, the co-founder and COO of Paxful, sued his business partner, Ray Youssef, Paxful’s CEO and co-founder, over allegations that Youssef concealed users’ information from him. This happened just a few weeks after the company announced its plan to delist Ether (ETH).

According to Youssef, Artur’s legal team was “really nasty” as they instigated the removal of the company’s senior-level staff. Paxful’s COO also refused to pay the exchange’s engineers and compliance team. The reduction in the workforce caused a ripple effect in the operations of the exchange.

At the start of April, Youssef announced that the company would be suspending operations due to staff reduction and regulatory difficulties, especially in the U.S. However, the Paxful self-custodial wallet remained operational, enabling users to access their funds and some peer-to-peer services.

On April 10th, the Delaware Chancery Court assigned a legal custodian to spearhead Paxful’s withdrawal. On April 21st, Youssef resigned from being the exchange’s CEO. While doing so, he echoed that his “priority will continue to be the resolution of frozen user funds and the reliability of the Paxful Wallet.” 

At the time, 88% of users’ funds were unfrozen from the troubled exchange.

Paxful Resume Business

Under the direction of the legal custodian, Paxful has resumed its regular trading activities.

“After a month away, we’re happy to announce that the Paxful marketplace is back online. [. . .] Over the last month, our team has worked diligently to get the marketplace back online with the safety and security of users paramount,” the exchange wrote.

Still, the latest blog post by the company failed to reveal the current status of its leadership or the lawsuit between the co-founders. The unaddressed matter has raised eyebrows from users, with some saying the platform should not be trusted.