According to the former CEO of Paxful, Ray Youssef, 88% of the previously suspended user accounts have been successfully unfrozen. Paxful is a prominent peer-to-peer cryptocurrency marketplace.
According to a statement by the company’s former CEO, the majority of Paxful’s previously frozen user accounts have been unfrozen. The announcement comes over a week after the platform’s operations were suspended.
In a Twitter thread on April 16, Ray Youssef, the former CEO of Paxful, stated that 88% of customer accounts had been unfrozen, leaving about $4.4 million in frozen funds on the platform. Youssef said that without the aid of engineers or compliance personnel, the unfreezing operation had been successful. He also stated that U.S. financial regulators have been in charge of the remaining frozen funds.
4.4m of frozen funds remain in Paxful, about 3.3% of total customer funds. We freed a total of 3m this year thru tremendous compliance effort. Those who would say that I am somehow destroying my reputation to steal 4m bucks are mad. I don’t have a price 4million or 4 trillion. pic.twitter.com/MU6GdUweZF
— Ray Youssef (@raypaxful) April 16, 2023
Despite the fact that just about 3% of all customer funds were still frozen, Youssef declared the account unfrozen as his final action as Paxful’s CEO. He risked being found in contempt of court by giving up his title in order to accomplish this feat. Youssef emphasized his dedication to the platform’s users by stating that “Integrity trumps risk.”
“Contempt of court” is perhaps a reference to the ongoing legal dispute between Youssef and Paxful co-founder Artur Schaback. The platform was co-founded in 2015 by Schaback, who has accused the firm of misappropriating funds, money laundering, and evading U.S. sanctions. Previously, Youssef called these accusations “ridiculous” and denied them.
Following the suspension of service for Paxful users on April 4, the accounts were unfrozen. Youssef explained the suspension by citing “regulatory challenges” and significant staff departures. Prior to this occurrence, the CEO had approved refunds for Earn program participants who had been impacted by Celsius’s bankruptcy months earlier.
The recent difficulties faced by Paxful show the growing scrutiny that Crypto platforms have to face as they navigate an evolving regulatory environment. It’s unclear how the company will do in the long run as it is working to fix these problems and win back user confidence. However, the unfreezing of a significant portion of user accounts is a move in the right direction towards regaining credibility and user confidence.