Paxful CEO and co-founder, Ray Youssef, made a promise to use his own money to reimburse users’ funds in an effort to avoid deeper legal issues. This comes after the sudden shutdown of his US-based P2P Bitcoin exchange platform.
Youssef’s move was prompted by the risk of him going to jail for failing to comply with court orders concerning the return of Paxful’s frozen funds. He stated that funds might “fall into oblivion,” and users might never recover them if he does not take this drastic measure.
Paxful’s Legal Troubles
The root cause of Youssef’s legal issues is his dispute with Artur Schaback, who is also a co-founder of Paxful. Schaback’s allegations include Youssef excluding him from internal operations and transferring funds fraudulently. Allegations of drug use and trafficking were thrown around in the bag, too.
On the other side of the fence, Youssef fired Schaback for alleged incompetence, misconduct, and refusal to participate in the company’s internal investigations.
Regulatory Issues
Paxful found itself among the list of cryptocurrency exchanges affected by regulatory pressure from the US government, resulting in its shutdown. The company reportedly spent millions attempting to comply, but it was insufficient. The closure of Paxful was the outcome of the regulatory problems and the lawsuit from Youssef’s ex-partner.
A New Platform
It seems that Youssef remains committed to the cryptocurrency ecosystem despite the shutdown of Paxful. Reports say that he is collaborating with Jack Dorsey, the former CEO and co-founder of Twitter, to establish Civilization Kit (Civ Kit), a decentralized P2P bitcoin trading platform.
Civ Kit is expected to launch this month. While it is currently hyped as a novel development for the Bitcoin ecosystem, some are wary that it may only turn out to be a replica of Paxful.
The Future of Civ Kit
It is unclear how the new platform being developed by Youssef will be affected by his negative publicity and court case. While he has been embroiled in legal disputes with Schaback and regulatory pressure from the US government that all led to the shutdown of his company, Civ Kit is considered to be a completely separate project.
However, negative publicity and legal issues can impact public perception and investor confidence, which may hurt the success of Civ Kit. It remains to be seen how Youssef’s past legal problems will affect the performance of the upcoming platform when it finally rolls out.
Final Thoughts
Not so long ago, Paxful appeared to be a very promising crypto exchange platform with its numerous payment options, affiliate program, and other gimmicks. Now, it has fallen hard due to major issues ranging from mismanagement and misdemeanors of the people at its helm.
With that, users must protect themselves from falling victim to issues similar to those faced by Paxful. Always research and read reviews as well as news from reliable sources before using any cryptocurrency exchange.
Ensure the exchange has a good reputation and a history of resolving disputes. Likewise, It is essential to store cryptocurrencies in a secure crypto wallet and to avoid leaving funds in exchanges for extended periods. Finally, it is advisable to diversify investments across different cryptocurrencies and exchanges to mitigate risks.