Peer-to-Peer BTC Exchange Paxful Announces it is Shutting Down
On Tuesday, April 4th, Paxful’s CEO notified the platform’s users that it is shutting down its operations. According to the message, while it isn’t guaranteed that the closing will be permanent, it very likely is. The platform also took the opportunity to recommend self-custody to its users and highlighted its commitment to safeguarding their assets.
Paxful Announces it is Shutting Down
This Tuesday, a screenshot of the message sent by Ray Youssef, the CEO of Paxos, to the platform’s users was posted to Twitter. The message revealed that the peer-to-peer exchange is closing and hints that there is a slight chance that the move may not be permanent. Youssef states that the main reasons for the closing are regulatory challenges and the departures of several important staff members.
Together with the unexpected closing, Paxful recommended self-custody to its users and reaffirmed its commitment to safeguarding their funds. The platform also promised easy migration to Noones for its international clientele, and to Bitnob for those based in Africa. Without naming others, Paxful also stated that easy migration to other P2P platforms will be available.
The decentralized exchange founded in 2015 has been faced, along with the entire digital assets industry, with a multitude of hardships and setbacks over the previous year. In late January, after the country revealed new registration requirements, it stopped operating in Canada. On March 29th, just days before shutting down, Paxful decided to make all users who lost funds with Celsius Earn whole.
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Despite the “Crypto Winter” and Regulatory Pressure, Crypto Industry Shows Signs of Recovery
After multiple major setbacks and catastrophes, the entirety of the year 2022 is now widely considered the “crypto winter”. Last May, the stablecoin UST lost its dollar peg causing LUNA to drop sharply in what became a collapse that wiped out an estimated $60 billion worth of investments and sent multiple companies into bankruptcy. In November, another scandal emerged as reports of misconduct on the part of FTX caused a “bank run” that all but confirmed the rumors and sent the company into bankruptcy.
The overall decline in the sector which, throughout the year, saw its market cap diminish by around $2 trillion, severely impacted investors and institutions operating in the industry. Some of the hardest-hit were Bitcoin miners who, due to the currency’s diminished price, were forced into selling most of their assets just to stay afloat. Core Scientific, one of the more recognizable names, was even forced into bankruptcy before the end of the year.
While the start of 2023 was more promising with January proving one of Bitcoin’s best months in a decade, February brought new trouble. US regulators went on an offensive targeting the stablecoin BUSD, and crypto staking services primarily through a settlement with Kraken. In March, the digital assets industry’s access to banks was severy jeopardized when two crypto-friendly banks got closed in the span of less than a week.
Despite the hardships, however, the cryptocurrency industry is still showing signs of recovery and renewed growth. Similarly, the price of major cryptocurrencies like Bitcoin has continued rising, albeit in a staggered fashion, and has nearly doubled from its 2022 low. NFTs are also seeing a resurgence with aggregator platforms like Blur proving particularly popular.
Why did Paxful decide to shut down its operations so abruptly? Tell us what you think in the comments below.