Ray Youssef, CEO of Paxful Bitcoin exchange, has announced the indefinite suspension of the marketplace, citing regulatory challenges and staff departures. This move comes as a growing list of cryptocurrency exchanges are closing shop due to legal hurdles in the U.S.
Regulatory Challenges Lead to Suspension of Paxful Bitcoin Exchange Paxful, a popular Bitcoin exchange, has announced its decision to suspend operations indefinitely. CEO Ray Youssef cited regulatory challenges and key staff departures as the reasons behind this move. Youssef further stated that safeguarding customer funds remains a priority for the exchange, and he encouraged customers to withdraw and self-custody their assets.
U.S. Regulatory Crackdown on Cryptocurrency Exchanges
Paxful is not the only cryptocurrency exchange facing regulatory challenges in the U.S. Recently, Bittrex, a Seattle-based exchange, announced the winding down of its U.S. operations due to similar reasons. Beaxy, another U.S.-based platform, was also shut down by the Securities and Exchange Commission (SEC) for operating an unregistered exchange. The regulatory crackdown on the cryptocurrency industry has been intensifying, with the CFTC suing Binance, the world’s largest crypto exchange, for violating compliance rules just last week.
Also Read: Coinbase Considers Move Outside US Amid Regulatory Concerns: Reports
Lawsuit from Co-Founder Adds to Challenges
During a Twitter space on Tuesday, Youssef revealed that a lawsuit brought by a co-founder of Paxful was also a contributing factor to the decision to suspend operations. Although he did not name the plaintiff explicitly, it is believed to be co-founder Artur Schaback, who filed a lawsuit against Youssef in January. Schaback has accused Paxful and Youssef of kicking him out of the company over a year ago. A Paxful spokesperson declined to provide details about the lawsuit but confirmed Schaback’s status as a co-founder and current board member of Paxful.
Paxful’s suspension of operations adds to the growing list of cryptocurrency exchanges facing regulatory challenges in the U.S. The industry has been under increased scrutiny from regulators, resulting in closures and lawsuits. Safeguarding customer funds and navigating regulatory compliance will likely continue to be significant challenges for cryptocurrency exchanges in the coming months.
