Paxful is shutting down

[OmegaStarScream]

Apparently, Paxful (one of the largest[1] P2P exchanges) is going to close its doors. I just saw this on Twitter:



This comes days after Paxful had some issues processing users withdrawals[2].

The message states that users should withdraw their funds but according to the status page[3]. The wallet system is down for all their supported currencies with the exception of Bitcoin's lightning network.

[1] https://monetory.io/en
[2] https://bitcointalk.org/index.php?topic=5447245.0
[3] https://status.paxful.com/

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[stompix]

And another goes down, let's see how many will be left by the end of the year.
Never used it although I have an account there but I can picture the impact in countries where it had way more usage, wonder where will all migrate, it's Binance and Bybit maybe? With locabitcoin gone, localcrypto gone, DEX not really gaining traction despite all this mess seems like there is only one temporary winner here, that until due to another series of "regulatory challenges".

Btw, does anyone have a clue what kind of regulatory challenges are they all talking about, cause everyone claims the same thing without bothering to go one sentence further? 

[YOSHIE]

Apparently, Paxful (one of the largest[1] P2P exchanges) is going to close its doors. I just saw this on Twitter:

I also saw an hour ago the latest news about Paxful exchange, as Youssef said.

PEER-TO-PEER BITCOIN EXCHANGE PAXFUL SUSPENDS MARKETPLACE

According to Youssef, all customer funds are accounted for, and the Paxful Wallet will be up for customers to retrieve their funds. To facilitate the process, Paxful is recommending options such as Exodus Wallet and Muun Wallet for customers to self-custody their funds. The company is also offering an easy migration to other options for non-U.S. users, including Noones, a new P2P company dedicated to the Global South, and Bitnob, which makes it easy for Africans to connect with Bitcoin.

We hope that users who use the Paxful exchange and who don't know this information, with the topic created by @OmegaStarScream, can help to solve their problems, especially regarding funds.

[Bitcoin_Arena]

First it was Localcryptos announcing a shutdown around 21 October last year  - LocalCryptos is shutting down and then Localbitcoins annouces on 9th- Feb 2023 that they as shutting - LocalBitcoins will discontinue its serviceand now paxful!

Which one next? HodlHodl? Remitano?

I think we are now seeing a pattern here.

Btw, does anyone have a clue what kind of regulatory challenges are they all talking about, cause everyone claims the same thing without bothering to go one sentence further?  

I think most of them are shutting down before regulators come for their asses, or they might have already received warnings, especially given the fact that they are headquartered in known jurisdictions that can act cocky towards crypto at any time. For example Localcryptos was Australian based, Localcryptos was based in Finland, Paxful is based in Delaware US though some sources claim that they have head quaters in Estonia

[Little Mouse]

Centralized exchanges with so called P2P has forced all of them to shut down? Ridiculous. After Binance, Kucoin and some other CEXs offering fake P2P transactions, all of these are getting shut down!

Which one next? HodlHodl? Remitano?

I dont know anything about Remitano but Hodl Hodl is pretty much better service. I dont think itself going to shut down. Their business model isn't the same of Paxful.

[bittraffic]

There was no real reason stated in the message. This must have started when SEC stopped Paxful from printing BUSD.

Not allowing altcoins to be withdrawn. I can only assume they were forced by the government not to let users withdraw the assets deemed to be security. They may not totally shut down but will just allow users to claim those altcoins when regulations are ironed out.

[dzungmobile]

I guess it more relates to Chipmixer money laundering on Paxful (if you read the report) than relates to Celsius.

Both Paxful and LocalBitcoins were used by that man and likely Peer-to-Peer marketplaces are now more regulated by US government. They have to go ahead and shut down their services or they were requested to do that.

https://www.justice.gov/opa/press-release/file/1574581/download

[stompix]

There was no real reason stated in the message. This must have started when SEC stopped Paxful from printing BUSD.

That's Paxos, not Paxful, no relation other than the similar names.

I dont know anything about Remitano but Hodl Hodl is pretty much better service. I dont think itself going to shut down. Their business model isn't the same of Paxful.

Not really that much different and Localcypto went down just as surprisingly, so every single one of them going down won't surprise me.

[Baofeng]

And another goes down, let's see how many will be left by the end of the year.
Never used it although I have an account there but I can picture the impact in countries where it had way more usage, wonder where will all migrate, it's Binance and Bybit maybe? With locabitcoin gone, localcrypto gone, DEX not really gaining traction despite all this mess seems like there is only one temporary winner here, that until due to another series of "regulatory challenges".

Btw, does anyone have a clue what kind of regulatory challenges are they all talking about, cause everyone claims the same thing without bothering to go one sentence further? 

From what I read, they could have been affected by the Celsius bankruptcy. They established a partnership with Celsius to offer their users to earn yield money on their bitcoin. Apparently, when Celsius collapses and so is the bitcoin of their users, and as such the CEO of Paxful, refunded their customers their money from Paxful's own pocket. And it could possible cost them a lot at this point.



https://twitter.com/raypaxful/status/1641105827892264960

[LeGaulois]

I've say it with localcrypto-localbitcoin. They will all have the same restrictions, obey to the same laws etc, and no matter what is the country location.
Do you really belive nothing will change and the companies will be operating without to bother with AML stuff? You're dreaming
Once the purge will be done with marketplaces, watch out for the instant exchanges to be the next target. KYC will be a must, even for just $1

Marketplaces, CEXs, instant exchanges, deal with money, like banks do, so everyone in the same bag and everyone with the same financial laws.
It's what I call "justice" to be fair with everyone

So according to this logic, Binance should also stop its business since Chipmixer used this exchange

[Potato Chips]

I took a look at noones' p2p marketplace and it's basically paxful lol. Their help articles [about the p2p marketplace] are also similar indicating they work similarly.

https://paxful.zendesk.com/hc/en-us
https://support.noones.com/hc/en-us

Furthermore, some people are reporting they were automatically able to login to noones using their paxful login information. Note that this doesn't apply to banned countries in noones like USA, UK, Canada, etc.

Signin with the same user/pass of the Paxful. You already have an account with noones if you have one with paxful.

I did not use Noones and to use the Noones, just use your paxful info to sign in not signup oo to the account

I just logged in noones with my paxful ceredentials

Makes me think paxful just moved to a different jurisdiction under a new project...

[Accardo]

It's a difficult time for people in countries that don't have vendors who trade bitcoin with bank transfers. How can people who don't like patronizing centralized exchanges convert their bitcoin to fiat? Localbitcoin and paxful gone in a twinkle of an eye, the market is losing lots of good projects. These two p2p platforms provided good rates and good user interface. Well, I see some p2p platforms coming out in the market, yet to confirm their authenticity. It'll be risky to move quickly to startup p2p platforms as lot of it are sprouting out to deceive people since top platforms are getting closed. 

[o_e_l_e_o]

Paxful was just another centralized, KYC demanding, zero privacy, zero security exchange, which used the label "peer to peer" as a marketing gimmick despite being no such thing. Just like LocalBitcoins. I do not care in the slightest that they are shutting up shop.

Noones is absolutely just Paxful under a different name and excluding the US. It also has the same KYC requirements, centralized wallets, and all the other downsides of centralized exchanges.

If you want to use an actually decentralized exchange or trade actually peer to peer without these centralized exchanges spying on you and taking control of your coins, then pick an exchange from here, ideally Bisq or RoboSats: https://kycnot.me/

[Bitcoin_Arena]

I dont know anything about Remitano but Hodl Hodl is pretty much better service. I dont think itself going to shut down. Their business model isn't the same of Paxful.

Obviously, the model is not the same as Paxful, I agree. But so was localcryptos. It's still vulnerable to external pressures since it's not decentralized.

HodlHodl is not censorship resistant to even any degree like Bisq. Government and law enforcement can shut it or force the owners to shut it down anytime they want.

[coupable]

I'm sure the news surprised us all and disappointed because despite being a popular platform for buying and selling, Paxful has been facing increasing regulatory pressure and this, in my opinion, is the real reason behind its suspension. The regulatory authority on the platforms started since the beginning of the year after the collapse of Ftx, we lost the two largest platforms for peer-to-peer transactions localbitcoins and Paxful. I don't know if there are alternatives that have the same degree of credibility.
And as the pressures continues to evolve, it will be interesting to see how other platforms would respond to similar challenges. What is happening with many platforms recently highlights the need for the industry to work towards more stable and sustainable solutions for the benefit of all parts.

[dollarday]

Sadly, this feels like the banks and big government will move in to further regulate the buying and selling of bitcoin.

Both Localbitcoin and Paxful presented a ton of anonymous yet safe options to buy bitcoin, from prepaid credit cards, to gift cards, to western union and moneygram transfers. It seems for western-based traders only bitcoin atms and exchanges that are fall under KYC rules will be available to buy and sell bitcoin.

Does this kill off in person trades in the US. Will another centralize place with a trusted escrow and review system rise to take it's place? Or will we have to only depened on exchanges that can shut down and run off with customer's funds?

[yhiaali3]

Unfortunately, we heard the sad news today, I was really sad to hear the news of these successive closures, for months we have been hearing about the closure of these large services Localcryptos, Localbitcoins and now Paxful and we do not know who is next.

These services did not shut down due to US regulatory pressures but rather due to the financial crises and the bad state of Crypto in general as business has come to a grinding halt and it has become difficult to continue operating.

All this is in addition to the harsh regulatory pressures by the US government that led to the closure of chipmixer and since the days of the Bittrex exchange.

Lots of closings in the market and we don't know what could happen next.

[PX-Z]

What?! So what are the remaining?
P2P exchanges/marketplace are getting shut most probably of regulation reasons. Privacy platforms are getting shutdown as well.
Looks like global adoption and regulation have massive negative impact now. Well, well, well.

[hugeblack]

Centralized exchanges with so called P2P has forced all of them to shut down? Ridiculous. After Binance, Kucoin and some other CEXs offering fake P2P transactions, all of these are getting shut down!

I also lean towards the scenario that competition is the main reason behind this closure, although I am surprised at its speed, as many people use this platform to buy and sell gift cards, which is relatively good and may enable them to hold out for a while, but what happened happened.

Most of P2P platforms are centralized, and those that have been closed are completely centralized, so I do not think that they will have an impact on the market, as alternatives are available.
I hope this war on central platforms ends because it accelerates lockdowns.

@OmegaStarScream How do you do it? You are almost the first one who's posting topics about closing platforms.

[Darker45]

It seems the domino of bankruptcy and insolvency is now being replaced with a domino of voluntarily giving up. But I think this isn't part of it. It seems this isn't even about regulatory policies smothering them. Perhaps it is convenient to drop this regulatory challenges excuse, but this isn't the primary reason. This is also not about centralized platforms offering P2P, competing against them. 

This is most probably the result of Youssef's co-founder Artur Schaback's lawsuit against both Paxful and Youssef. Schaback was kicked out by Youssef more than a year ago. Schaback then filed a lawsuit in Delaware 3 months ago. As a direct result of Schaback's legal actions, the "key staff departures" that Youssef mentioned happened. To the point that "there were no engineers, compliance team members, or security personnel left working at the company." This actually prompted Youssef to shut down the platform, specifically its security implications.^[1]

[1] https://decrypt.co/125411/paxful-bitcoin-marketplace-closure-cofounder-lawsuit