Crypto exchange company Paxful is struggling to stay afloat and might finally close shop soon, this is according to an exclusive report on TechNext.
According to the tech publication, the Bitcoin p2p marketplace is currently running at a loss and it is now digging into its users’ funds to pay legal bills. This will make it the latest big profile crypto company to face financial troubles since Patricia.
Earlier this year, Paxful announce a relaunch of operations following reports of behind-the-scenes rifts between co-founders and a rumored shutdown announcement. Founded in 2015, Paxful became one of the most popular places to buy bitcoin in Africa and other emerging markets, and it had more than 200 employees.
Of late, Paxful has received enormous backlash online as customers have complained about the company’s inefficiency.
In one of the exchanges on the beleaguered company’s Twitter comment section, users complained about the rise in fraud rate on the platform. They also bemoaned the slow transaction rate, indiscriminate ban of accounts, dispute resolution and inability to withdraw funds.
According to a user who spoke with Technext, he started a withdrawal process of almost $2,000 USDT last Saturday and the receiver has not received it despite the fact that the sender has been debited. Also, the transaction has not been assigned a transaction ID.
What this means is that the payment transaction which on a normal day wouldn’t take more than a couple of minutes is still ‘pending’, one week after. When the customer reached out to the support team.
Paxful is headed for the rocks
Following the bitter falling out between Paxful’s cofounders Ray Youssef and Artur Schaback earlier in the year, that episode got to a peak in April when Ray announced the shutdown of the exchange and tried to force his partner out of the company.
Paxful would later resume operations in May under the leadership of new CEO, Roshan Dharia. Sources claimed that the company is operating with just one compliance officer, in contrast to the over 80 officers it previously had. This could compromise its safety and compliance standards. Technext also learnt that there is a shortage of capacity in the engineering team as old engineers are yet to be paid. This, has contributed to the recent withdrawal debacle.
Paxful typically has about 200,000 daily transactions from around 2020. The number has declined to below 30k daily. This explains why the trade statistics- which were previously made available to all on the website– have been brought down.
Response from Paxful
When reached for questions and clarifications on these concerns. In response to the issues raised, CEO Roshan Dharia said:
“Since our relaunch in May, Paxful has appointed a roster of seasoned executives across our legal, compliance, and engineering departments. The company is well-capitalized and continues to grow rapidly with millions of global users. Paxful has a very bright future ahead and thus we do not intend to comment further on these allegations.”– Paxful CEO, Roshan Dharia
Paxful is a peer-to-peer (P2P) cryptocurrency exchange and online marketplace that allows users to buy, sell, and trade various cryptocurrencies, including Bitcoin. It serves as a platform that connects cryptocurrency buyers and sellers, enabling them to interact directly with one another to facilitate the exchange of digital assets.
Paxful provides a wide range of payment methods to suit the diverse needs of its users. These payment options include bank transfers, online payment systems, gift cards, and various other methods. Users can create offers to buy or sell cryptocurrencies and specify the terms of the trade, such as the price, payment method, and any additional requirements.
The platform is known for its accessibility and the ability to cater to users in regions with limited access to traditional banking services, as it often allows them to trade cryptocurrencies using methods that are more convenient for them. Up until 2023, Paxful had grown to employ more than 200 people in four offices around the world, with $5 billion traded on its platform by more than 12 million users over the course of its existence, according to court filings.