Paxful could be the latest company to be impacted negatively as a result of the truth that the worldwide peer-to-peer (P2P) market is rapidly losing popularity.
Paxful CEO Ray Youssef announced in a blog post that the company will immediately begin shutting down its activities, and there is no guarantee that they will ever resume again in the future. (1)
The following is what the introduction says:
“From today, Paxful will no longer be operating its market. We do not know for certain if it will make a return.
Youssef acknowledges that the news might come as a great surprise to many people, but he also notes that closing down is now increasingly becoming more of a trend among pure P2P services.
The announcement of the closing of Paxful comes a scant two months after the announcement of the closure of LocalBitcoin in February, further reducing the number of choices available for individuals to trade cryptocurrency with one another.
Paxful & LocalBitcoin were two of the few companies that focused solely on peer-to-peer transactions. In contrast, other exchanges like Binance facilitate P2P trades.
Paxful laments the difficulties posed by regulations
Youssef claims that the current degree of oversight in the P2P economy is one of the primary motivating factors behind Paxful’s decision to withdraw from the market. The chief executive officer observes that the regulatory environment is rather difficult, and that it would be most prudent to halt operations while the company works through the challenges.
In addition, Youssef asserts that the platform has experienced a rise in the number of staff members quitting their jobs, particularly those working in executive positions.
But, according to him, a lawsuit that was brought by one of the co-founders of Paxful is the primary reason for their departure.
Youssef feels that Paxful will have the opportunity to resolve concerns if it goes into hiatus. In the meantime, though, he has suggested to users of the platform that they do their business elsewhere. He had written:
“As we work through these challenges, we have taken the most secure choice and ask you to seek self-custody and trading elsewhere. We apologize for any inconvenience this may cause.”
After taking the preceding statement into consideration, it is possible to conclude that there is no missing money from customers’ accounts.
Privacy Issues
Trading Bitcoins between individuals will unquestionably become a great deal more challenging as a direct result of the closure of LocalBitcoins and Paxful, particularly concerning issues of privacy. Even if there are still some P2P networks available, users are unable to trade Bitcoin with the same degree of convenience and anonymity as they were able to in the past.
The other option is for them to conduct their business within regulated markets that are overseen by exchanges.
Paxful first went live in 2015 and had meteoric popularity growth almost immediately, particularly in Nigeria, China, India, Kenya, and the United States. As of the year 2022, it already had close to 9 million users all across the world.