Key Highlights
- Paxful, a popular peer-to-peer Bitcoin exchange in Nigeria, announced its closure due to employee departures and regulatory climate.
- The Central Bank of Nigeria banned crypto trading via Nigerian banks, but between January 2021 and June 2022, Nigerians transacted more than $1.16 billion in Bitcoin on Paxful.
- Paxful is embroiled in a legal battle with co-founder and former COO Artur Schaback, who filed a lawsuit against it in January, and LocalBitcoins, another P2P Bitcoin platform based in Finland, has ceased operations due to challenging market conditions.
Paxful, a popular known peer-to-peer Bitcoin exchange in Nigeria, announced its closure on April 4. The decision was made, according to Paxful’s founder and CEO Ray Youssef, due to “important employee departures” and the regulatory climate.
Youssef wrote, “We are unsure if it [the marketplace] will come back. Customers were urged to withdraw their monies after he said that all customer funds had been accounted for. Links to other platforms that Paxful advised non-U.S. users to migrate to were supplied in the blog post.
The Central Bank of Nigeria (CBN) has banned crypto trading via Nigerian banks, thus between January 2021 and June 2022, Nigerians transacted more than $1.16 billion in bitcoin on Paxful.
The market for trading ether was shut down by Paxful in December due to the network’s migration from proof-of-work to proof-of-stake. The platform has only traded bitcoin since that time.
Although there are other P2P players in Nigeria, Paxful is the only P2P exchange that has made its data public and publicized.
The Crypto trading platform was an American-based corporation that catered to a worldwide clientele with a focus on the global south, according to Youssef, who stated this during a Twitter Spaces meetup. Even that was insufficient to appease Uncle Sam, he claimed, adding that “a fifth of the company was compliance employees.”
Youssef continued, “American regulators have done a tremendous job catching up given their pace,” but “the regulators still don’t get it. Every day, they show more suspicion.”
Youssef revealed tactics by the corporation that attracted regulatory concern in the United States, such as utilizing gift cards to join people in Africa without bank accounts. “If we had the staff, blocking US customers and carrying on business “would have been an option. It doesn’t make sense in terms of business,” Youssef remarked.
Along with issues with employee turnover, the business is also embroiled in a legal battle with co-founder and former COO Artur Schaback, who filed a lawsuit against it in January and named Youssef and Jude Chidi Ogene as defendants. Until March, Ogene served as Paxful’s chief legal officer, as stated on his LinkedIn profile. In that situation, the complaint was sealed.
On March 29, Paxful declared that it will “in the next days” return users of its Earn program any money that had been placed in Celsius following its bankruptcy.
Recall that on February 9, LocalBitcoins also made a formal announcement that the company was ceasing operations due to the challenging market conditions brought on by the continuing bitcoin winter. LocalBitcoins, a peer-to-peer (P2P) Bitcoin platform based in Finland, has ceased operations after serving clients for more than ten years.
CEO of LocalBitcoins Nikolaus Kangas stated, “We have regrettably concluded that LocalBitcoins can no longer provide its Bitcoin trading service, despite our attempts to overcome challenges and bring our transaction volumes and declining market share back to growth.”
The LocalBitcoins team had 50 employees at the time of the announcement. All users were instructed by LocalBitcoins to withdraw their Bitcoin holdings from their service and their LocalBitcoins wallets. Users can withdraw Bitcoin from LocalBitcoins for a full year, according to the release.
But of course, we encourage you to proceed with the withdrawal sooner, the company said.