Paxful unfreezes majority of user accounts amid legal battles and regulatory challenges
Paxful, a leading peer-to-peer cryptocurrency marketplace, has successfully unfrozen 88% of previously suspended user accounts, as announced by its former CEO, Ray Youssef.
Paxful has seen a majority of its previously frozen user accounts unfrozen, according to an announcement from its now-former CEO. The update comes over a week after the platform suspended its operations.
On April 16, Ray Youssef, Paxful’s ex-CEO, revealed through a Twitter thread that 88% of user accounts had been unfrozen, leaving around $4.4 million in frozen funds still on the platform. Youssef stated that the unfreezing process had been achieved without the assistance of engineers or compliance personnel. He further claimed that the remaining frozen funds were under the control of U.S. financial regulators.
Despite approximately 3% of total user funds remaining frozen, Youssef declared the account unfreezing as his last act as Paxful’s CEO. He relinquished his title in order to achieve this feat, and in doing so, risked being held in contempt of court. Youssef said, “Integrity trumps risk,” emphasizing his commitment to the platform’s users.
The mention of “contempt of court” likely refers to the ongoing legal battle between Youssef and Paxful co-founder Artur Schaback. Schaback, who co-founded the platform in 2015, has accused the company of misappropriating funds, laundering money, and evading U.S. sanctions. Youssef dismissed these allegations as “ridiculous” in a previous statement.
The unfreezing of accounts follows the suspension of operations for Paxful users on April 4. Youssef cited “regulatory challenges” and key staff departures as reasons for the suspension. Prior to this development, the CEO had authorized refunds for users of the Earn program who were impacted by Celsius’s collapse months earlier.
Paxful’s recent challenges highlight the increasing scrutiny facing cryptocurrency platforms as they navigate the evolving regulatory landscape. As the company works to address these issues and restore user trust, it remains to be seen how it will fare in the long run. The unfreezing of a significant portion of user accounts, however, is a positive step towards rebuilding credibility and confidence among its users.
