Africa-focused crypto firm Paxful announces closure

[ad_1]

Paxful, a global bitcoin marketplace with strong roots in Africa, is shutting down and returning funds to users. CEO Ray Youssef cited massive staff departures and increasing regulatory issues as reasons for the company’s closure.

The peer-to-peer bitcoin platform is popular in Africa, with Nigeria and Kenya among the top countries on its country volume list. According to Youssef, the exits were so bad that “there were no more engineers, compliance team members or security personnel working in the company”. This situation painted a huge security risk that prompted the decision to close the company’s doors.

With this announcement, Paxful joins the list of US-based crypto companies that had to shut down due to a regulatory fire. Last Friday, Bittrex, a Seattle-based crypto exchange, announced its shutdown due to regulatory challenges. Another US-based platform, Beaxy, was shut down by the Securities and Exchange Commission for operating an unregistered exchange. Even crypto giant Binance was sued last week by the Commodity Futures Trading Commission for violating compliance rules.

Youssef thinks US regulators “still don’t get it” and are increasingly wary of crypto companies. However, several reports reveal that infighting may have contributed to the company’s problems.

Paxful co-founder Artur Schaback took to court to challenge Youssef and the company after, according to Youssef, he was kicked out more than a year ago. Youssef said Schaback’s “nasty litigation team” forced the departure of senior executives from the company.

With the release of Paxful, the spotlight is once again on African crypto companies, many of which are registered in the United States. As the crypto winter continues for another year, we can only hope that the ripple effects of these shutdowns and regulatory measures will not be ruinous for the African crypto ecosystem.

TechCabal interviewed an anonymous Quidax team about the local implications of the struggling US crypto ecosystem. “We don’t do business in the United States. Quidax is registered here in Nigeria,” the staff replied.

Get the best African tech newsletters delivered to your inbox

[ad_2]