P2P marketplace Paxful cites regulatory pressure as it suspends …

Digital wallet and P2P marketplace provider Paxful will be suspending operations effective immediately. “We are not sure if it will come back,” said CEO Ray Youssef in a blog post earlier this week. He cited increasing “regulatory challenges” as the main reason for the closure. However, the continuing fallout from the Celsius bankruptcy and an ongoing legal dispute between Paxful’s co-founders likely also played a part.

Paxful always aimed itself squarely at “underserved” markets both in wealthy countries and increasingly in the “Global South,” trading between parties with a wide range of other payment options and assets–most notably gift cards. It also operated a marketplace where users could list items for sale for payments in digital currency. The company’s gift card market was famous in places where bank accounts are not universal, and Paxful had pushed into African markets like Nigeria.

They were also used in the West, where certain people have been banned from payment providers or blocked from making payments to certain businesses/industries for various legal and political reasons. Though regulations were increasing the pressure for digital currency businesses worldwide, they were affecting P2P markets “most heavily in the U.S.,” Youssef wrote. He later added in a Twitter Spaces group that U.S. regulators had been initially slow to move in the digital asset space but had “done a great job catching up” in recent years.

Youssef, originally from Egypt but raised in New York City, is a well-known commentator and social media figure in the digital asset community. He pledged not to withdraw funds from his personal wallet until all customers had done so first:

I’m not withdrawing my btc from @paxful until everyone else gets theirs out first ? pic.twitter.com/v0hq62SQaB — Ray Youssef (@raypaxful) April 5, 2023

“We’re not in skyscrapers with “the suits”–we’re on the streets with the people,” the company’s website says.

Youssef added that, over time, regulations had forced about a quarter of his staff to concentrate on compliance issues. While one option would have been to block U.S. customers from using Paxful, this didn’t make any sense business-wise. Paxful had also seen problems following the Celsius Network bankruptcy, where its users found their funds from the Celsius Earn program locked and ruled by a judge to belong to Celsius, not depositors.

As a customer service gesture, Paxful promised to refund any amounts lost to Celsius Earn from its own reserves. Since January 2023, the company has been in a legal dispute between current executives and original co-founder Artur Schabak. Though the complaint, filed in Delaware, was over an alleged breach of fiduciary duty, details of the dispute remain sealed and confidential.

In happier times, Schabak and Youssef were arrested in Miami in 2016 on drugs and weapons allegations following a wild party at an apartment in the city. Charges against them were dismissed later that year. Digital asset businesses, particularly those sticking to old-school “crypto” principles of anarcho-capitalism and freedom through less-traceable payments, face ever-increasing heat from financial regulators.

Though Paxful and similar services are not accused of doing anything illegal, the nature of P2P marketplaces that allow free exchange of value (again, such as combinations of digital assets and anonymous gift cards) make them among the first in line for scrutiny. More and more, the blockchain/digital asset industry is growing to mirror the traditional financial industry, with all its restrictions and red flags for consumer protection and money laundering regulators. Exchanges are facing increasing pressure to monitor their users’ activities both within and outside the platforms they use, with demands they register identities behind external wallet addresses and pay closer attention to transfers of stablecoins like USDC and Tether.

Watch: The Future World with Blockchain

width=”200″ height=”112″ frameborder=”0″ allowfullscreen=”allowfullscreen”>

New to Bitcoin?

Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin–as originally envisioned by Satoshi Nakamoto–and blockchain.

Tags:

clear-chemist listed on couponmatrix.ukcuckooland listed on couponmatrix.ukfat-buddha-store listed on couponmatrix.ukflexispot listed on couponmatrix.uknoa-and-nani listed on couponmatrix.ukscs listed on couponmatrix.uk
clear-chemist listed on couponmatrix.ukDiscover Clear Chemist, your trusted partner in health and well-being. At Clear Chemist, they believe in providing accessible and affordable healthcare solutions without compromising on quality. Whether you're looking for over-the-counter medications, skincare essentials, or vitamins and supplements, their extensive range of products caters to all your health needs. With a commitment to excellence and customer satisfaction, Clear Chemist strives to make your shopping experience seamless and enjoyable. And here's the health-conscious consumer's secret – unlock exclusive savings with a Clear Chemist discount code. Join us on a journey towards optimal health and vitality, where affordability meets excellence at Clear Chemist.
cuckooland listed on couponmatrix.ukCuckooland specialise in bringing customers luxury furniture and homeware with a difference. Everything they stock has something extra special about it, with Cuckooland collecting the weird and wonderful from all sides of the globe. Add whimsy and enrich your home all for less with a Cuckooland discount code and pick up everything from outdoor igloos to stunning storage. Homeware should be as beautiful as it is practical, and on Cuckooland, you can find just that.
fat-buddha-store listed on couponmatrix.ukFat Buddha Store was founded in 2006 by two friends who wanted to create a website that would offer discounts on clothing and urban accessories. Fat Buddha Store offers a wide range of products from international brands you know and love like Nike, Adidas, and Puma - all available for less with the latest Fat Buddha Store discount code from Groupon. Regardless of your preference, Fat Buddha Store is a great place for fashion fans of all sizes to find their perfect match. At Groupon, we work hard to find the best discount codes for our customers. We partner with Fat Buddha Store to bring you exclusive promo codes that you can use to save money on your next fashion binge. Whether that means enhancing your shoe rack with a pair of Adidas Originals or stocking up on spray paint for your next urban escapade, we've got you covered. Looking for a discount on the latest in fashion? Check out our Fat Buddha Store voucher codes and bag a bargain on whatever clothes or accessories catch you eye. Stocking everything from new outfits for nights out to snazzy sneakers to rock at the gym, Fat Buddha Store provides chic in every element of your wardrobe. So what are you waiting for? Start shopping and save today!
flexispot listed on couponmatrix.ukFlexiSpot is a brand built on the ethos that a healthy worker is a happy worker. As experts in crafting ergonomic furniture to promote productivity and good health, FlexiSpot products make ideal for both office and work-from-home setups. Available at phenomenal rates when bought with the latest FlexiSpot discount code, FlexiSpot desks and chairs pay dividends through their quality craftsmanship and the long-lasting benefits they provide to you and your body.
noa-and-nani listed on couponmatrix.ukNoa and Nani brought fun and functionality to children’s furniture back in 2013, and the range has expanded to include furniture for the whole family, including stylish dining sets, desks and wardrobes. From quirky cabin beds and bed tents to chic living room furniture with plenty of storage, Noa and Nani knows what families need to keep things running smoothly! Don’t forget to apply your Noa and Nani discount code to give your home the TLC it deserves without breaking the bank.
scs listed on couponmatrix.ukGet all your furnishing needs at ScS. Whether you’re after a new sofa, some lush carpets, shiny new flooring, or any other type of furniture, ScS has everything you need and more. With your ScS promo code from us, updating your home has never been easier. You don’t even need to leave the house thanks to their convenient online shop putting the choice in the palm of your hands! Whether you’re a leather lover or prefer a soft fabric when it comes to seating, you’re guaranteed to find everything you need to make your dream home a reality at ScS.