Paxful to Shut Down Following Legal Battle with Co-Founder
- Paxful has a strong presence in Africa and South America,
- Paxful’s CEO, Ray Youssef, claimed the company was shut down due to security concerns.
- Youssed claims that a lawsuit by a co-founder influenced the decision to shut down operations.
Prominent crypto peer-to-peer marketplace Paxful has announced plans to suspend its operations. The news was shared by the company’s founder and CEO, Ray Youssef, who noted in a blog that the decision was triggered by regulatory uncertainty and the departure of key employees.
Prior to this news, Paxful had one of the largest customer bases and a heavy presence in Africa. However, Youssef noted that he was unsure if the marketplace would resume operations. He went to assure customers of the safety of their funds and encouraged them to withdraw their assets in the coming days.
Youssef also revealed during a Twitter space that the decision to shut down the marketplace was heavily influenced by a lawsuit filed by a Paxful co-founder who is suing the exchange and Youssef following his dismissal from the company over a year ago. Youssef said, “My co-founder sued the company and sued me. I have a lawsuit over my head right now.”
Youssef stated that the lawsuit caused many Paxful employees to quit the company. He claimed that the co-founder refused to pay some of the company’s employees. Youssef added that “his litigation team was really nasty. They drove away all of our senior-level staff, who just couldn’t deal with this guy anymore.”
Youssef claimed that by this past Friday, Paxful lacked engineers, people from the compliance team, or security employees. Youssef said shutting down the company was due to security concerns.
Reports suggest that the complainant is most likely co-founder Artur Schaback, who sued Youssef in Delaware Chancery Court in January. The news of Paxful’s suspension comes a few days after Youssef pledged to compensate Paxful Earn clients.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
