Could Paxful be in bad shape? The peer-to-peer (P2P) trading platform has apparently stopped publishing its proof of reserves. And ex-CEO Ray Youssef called on users to withdraw their funds. What do we know at the moment?
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« Retirez vos fonds » – L’ex-PDG de Paxful lance l’alerte sur un scénario à la FTX
Ex-Paxful CEO urges users to withdraw their funds
Ray Youssef expressed his fears in a Twitter post that echoes an alert launched by an anonymous Reddit user. The latter claims that Paxful has ceased to offer its proof of reserves on its siteand that users are therefore at risk:
Paxful has taken down its proof of reserves. I ask everyone to cease trading until we get to the bottom of this! https://t.co/qKtpA8DEic pic.twitter.com/p0JDXRCZEp
— Ray Youssef (@raycivkit) July 7, 2023
The anonymous user explains in his post that former Paxful employees would have explained that they had not been paid. He also reports other rumors:
“Their transfers aren’t working well, their lightning wallet was recently made inaccessible, and I’ve heard rumors about client funds being used to pay their charges, because they will probably go bankrupt.»
Evoking an “FTX-like scenario”, the message concludes with a call to withdraw its funds from the platform. For its part, Paxful did not communicate on this subject.
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The blurred interests of Ray Youssef
Since leaving Paxful in 2022, Ray Youssef has consistently encouraged users to leave the platform, to promote its own rival platform CivKit. In addition, he is currently engaged in a legal battle with the platform’s co-founder, Artur Schaback. The latter accuses the former CEO of having transferred funds from Paxful to a fake company, and of having facilitated money laundering.
Ray Youssef’s attacks against his former company are therefore self-serving to say the least, and therefore to be taken with a grain of salt. That said, various reports report on the tense situation at Paxful since the end of 2022. Last April, our colleagues from CoinDesk published a long report on the manifestly risky management of the exchange platform. The turf war between Ray Youssef and Paxful co-founder Artur has continued ever since.
If Paxful’s situation is therefore unclear, this is an opportunity to recall that it is more secure to keep your funds on self-hosted wallets. These are indeed exclusively accessible by the holders, unlike online platforms.
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Ray Youssef via Twitter, Reddit
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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