About 75,270 Paxful accounts with approximately $5.5 million have been frozen, and the largest batch is on temporary hold.
Paxful, a former peer-to-peer (P2P) crypto The marketplace has announced through its founder Ray Youssef that 88 percent of all frozen accounts have been unfrozen. Youssef also said that he has resigned from his position as chief executive officer, leaving the exchange as custodian under a bankruptcy law firm called Richards, Layton & Finger. Meanwhile, around 3 per cent of total client funds are still held up and in the hands of custodians.
Youssef has indicated that the frozen accounts have been placed under siege for a reason, including money laundering from the United States among other possible allegations. As a result, Joseph indicated that there was nothing he could do beyond what he had done.
“I quit my position as CEO to unfreeze these accounts and I am also at risk of contempt of court. That’s what I did, apart from many sleepless nights. I can’t do anything else but sleep well tonight. Loyalty outweighs the risk,” Yusuf noted,
Specifically, approximately 75,270 Paxful accounts with approximately $5.5 million have been frozen, and the largest batch is on temporary hold. According to details provided by Youssef, more than 58k Paxful accounts have been potentially compromised with a total balance of approximately $1.25 million. 828 has been charged a serious alert amount with a total balance of approximately $46k. About 5k accounts with a total balance of about $527k have been frozen for unknown reasons.
Reportedly, around 86 Paxful accounts have been accused of violating sanctions, totaling around $72k. Eleven frozen Paxful accounts have seizure orders from United States law enforcement with a total of $29k.
Paxful and Crypto Market
Most of Paxful’s operations were in African countries where it offered its P2P crypto trading services. However, the company attributed the departure of key employees, including the software engineering department. Additionally, the crypto marketplace blamed regulatory scrutiny from United States financial agencies for its downfall.
“This will probably come as a big shock to many. While I cannot share the full story right now, I can say that unfortunately we have lost some key employees. In addition, regulatory challenges for the industry continue to mount, particularly in the peer-to-peer market and most notably in the US, “Paxful noted,
Meanwhile, Yousuf said he has freed up a total of $3 million this year through regulatory compliance. He distanced himself from the authorities with claims of rug-pulling and possible theft.
Paxful has 4.4 million frozen funds, which is approximately 3.3% of total customer funds. We freed up a total of 3m this year through a tremendous compliance effort. Those who say that I am destroying my reputation to somehow steal Rs 40 lakh are insane. I don’t have 4 million or 4 trillion worth. pic.twitter.com/MU6GdUweZF
— Ray Joseph (@raypaxful) April 16, 2023
The company’s demise comes as cryptocurrency adoption continues to go mainstream around the world. As a result, Youssef has noted that he is working on other similar projects within the crypto space.
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