Peer‑to‑peer Bitcoin platform Paxful, which served 1.5 million users in Nigeria, announced that it is shutting down its operations. The co‑founder and chief executive officer, Ray Youssef, disclosed the decision in a blog post on Tuesday, stating, “Today, Paxful will be suspending its marketplace. We are not sure if it will come back.” He acknowledged that the news would likely shock many users and explained that the company has faced key staff departures and increasing regulatory challenges, especially in the peer‑to‑peer market in the United States. While addressing these issues, Paxful has chosen what it considers the most secure option and is urging users to explore self‑custody and trade on other platforms.
According to Decrypt, Youssef also mentioned in a Twitter Space that the closure was influenced by a lawsuit filed by a former co‑founder who was “kicked out of the company” over a year ago. “My co‑founder sued the company and sued me. I have a lawsuit over my head right now,” he said. Although he did not name the plaintiff, the lawsuit appears to be the one filed by co‑founder Artur Schaback in the Delaware Chancery Court in January, as indicated by a docket on CourtConnect.
Despite a ban on cryptocurrency in Nigeria, the country remains a major hub for crypto activity. The 2020 Geography of Cryptocurrency Report by Chainalysis ranked Nigeria eighth in crypto adoption and usage among 154 countries. Crypto accounting firm Recap listed Lagos and Ibadan among the world’s top 50 crypto hubs in 2022, placing Lagos at 14 and Ibadan at 24. Paxful is credited with pioneering peer‑to‑peer technology in Nigeria, helping to expand the local crypto industry. In a 2022 interview with Business Africa Insider, the CEO noted that Nigeria was Paxful’s largest market, with 1.5 million users and over $1.5 billion in transaction volume since 2015.
The Central Bank of Nigeria banned cryptocurrencies and related transactions in 2021, alleging that they are used for illegal activities such as money laundering, terrorism financing, the purchase of small arms and light weapons, and tax evasion.
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